Government, Trade, and Development and Macroeconomics introduction Flashcards
What is one of the biggest influencers on the economic portion of the macroenvironmental environment
The global trading system
What is one of the biggest political influencers on the macroenvironment?
more and more IGO’s with record membership
what are some cultural influences on the macroenviornment?
Sports, music, movies, fashion
what are some technological influences on the macroenviornment
connectivity and access
what are some demographic influences on the macroenvironment
aging and urbanization
why do governments intervene in the macroenvironment
Political reasons - diplomacy, national security, retaliation, consumer protection
what is “national competitive advantage”
Factor endowments,
demand conditions,
related and supporting industries,
firm strategy and structure,
rivalry
What are factor endowments
land, labor, capital, workforce, infrastructure
what are demand conditions
large, sophisticated domestic consumer base: innovation friendly environments with a testing ground
what are related and supporting industries
local suppliers cluster around producers and add to innovation
firm strategy, structure, rivalry
robust competition - national governments can create conditions which facilitate and nurture such conditions
How can governments intervene?
Trade Policy - tariffs, subsidies, import quotas, voluntary export restraints, local content requirements, anti-dumping policies, administrative policies
What are tariffs
taxes levied on imports
what are subsidies
government payments to domestic producers - cash grants, low-interest loans, tax breaks, government orders
what are import quotas
government specifies how much of what product can be imported from which countries
voluntary export restraints
a quota imposed by the exporting country officially or unofficially
what are local content requirements
some percentage of a good has to be produced domestically with local raw materials and local labor
what are anti-dumping policies
punishment for producers who dump and protect domestic producers
what are regional economic integration
agreements Among geographically proximate countries to reduce/remove tariff and non-tarifff barriers to free flow goods, services, and production
What are the levels of economic integration
free trade area (FTA)
costume union (CU): FTA+
common market (CM): CU+
economic Union (EU): CM+
Political Union: EU+
issues with regional integration
Economic enhancement of member states
political issues
Can be painful to the economy and national sovereignty
What is the difference between macro and micro economics
Macro - ENVIRONMENT
Micro - ECONOMY
What are cyclical vs Trend movements
Cyclical: peaks and troughs
Trend movements: trends from peak to peak and trough to trough
What do they call the top of a peak to the borrom of a trough
a contraction
what do they call the bottom of a trough to the top of the peak
an expansion
Economic conditions can be described in two ways, what are they
Tight or Slack - Labor Market
Overheated / underperforming - economy
What are the two cyclical economical policies
Monetary policy and fiscal policy
what is monetary policy
changes by the federal reserve bank to interest rates that cause an impact on the economy
what is fiscal policy
changes in taxes or government spending aimed at impacting the economy
what is the difference between nominal and real
real is nominal adjusted for inflation
What is GDP
quantity of goods/services sold during a period of time, that were produced in the same period
What are components of Aggregate Demand?
GDP = Consumption (largest) + Investment (house and business loans) + Government Spending + Net Exports
What is inflation
increase in the general cost of living
what is overall inflation
all inflation of all goods/services
what is core inflation
Overall inflation minus food and energy
What are some of the key price indices
CPI - volatile
PCE - more accurate, less volatile
GDP Deflator
PPI - inflation for businesses
What is stagflation
high inflation and high unemployment
What is ProMBA 24’s “Big 5”
Real GDP, PCE, Unemployment Rate, RFI, CapU
