International Economcis II Flashcards
Name 3 factors that contribute to globalisation
- Improvements in transport infrasturture and operations (Quicker & Cheaper Travel)
- IT & Communication Improvements allows companies to operate globally=
- TNCs - Lead to taking advantage of low labour costs to achieve higher profits , selling their goods and products around the world.
Give 4 impacts of Globalisation on Consumers
- Wider range of choice
2.Lower prices
3.Rise in prices (Incomes rise)
4.Loss of culture
Give 4 impacts of Globalisation on Workers
- Structural Unemployment - Job loss (e.g manufacturing sectors)
2.Increased migration > Lower wages > Increase in AD
3.Wages increase for high skilled labour - International competition > Fall in wages
Give 2 Impacts of Globalisation to the Government
- Higher Tax (Tncs & the people they employ pay tax)
2.Corruption (Tncs have the power to bribe and lobby governments)
Give 3 impacts of Globalisation on Economic Growth
- Investment within countries increases, TNCs represents and injection into the economy , encourages countries to make suuply-side improvements
- TNCs cause political insatbliltiy as they may support regimes which are unpopular and undemocratic
- TNCs bring technology which can benefit al industries
What are 4 assumptions of The Comparative Advantage Theory?
- Rhere are no transport costs ,and these could lower or prevent any comparative advantages
- Costs are constants and there are no economies of scale
3.Goods are assumed to be homogenous - Factors of production are prefectly moble, there are no tariffs or other trade barriers aand there is perfect knowledge
Name 4 Disadvantages of Specialisation and trade
1.Trade can lead to over-dependence ( OD of exports/imports)
2. Structural unemployment
3.Environemnt will suffer due to poblems with transport
4.Countries may suffer f rom a loss of sovereignty due to signing international treaties and trading blocs
Name 4 factors that influence patterns of trade
- Comparative Advantage
- Emerging economies
- Trading blocs and bilateral trading agreements
- Relative exchange rates
Name 3 Short-run factors that influence Terms of Trade
- Exchange rates
- Inflation
3.Changes in demand/supply of imports or exports
Name 2 Long-run factors that influence Terms of Trade
- Change in Productivity
- Change in Income
Name 5 types of trading blocs
1.Preferential trading areas
2.Free Trade Areas
3. Customs Unions
4.Common Markets
5. Monetary Unions
What is the role of the WTO
To bring about trade liberalisation and esure countries act according to trade agreements they’ve signed
What are 5 reasons for restrictions on free trade
- Infant indusrtry arguement , can’t compete in the international market (need to build up reputation and customer base and have to cover alot of sunk costs)
2.Job protection , allowing imports will mean domestic producers will lose out to international firms
3.protection from potential dumping
4.Danger of over-specialisation
Types of protectionisn/restrictions
1.Tariffs
2.Quotas
3.Subsidies to domestic producers
4.Non-tariff barriers (embargos)
Give 2 Impact of protectionist policies on Consumers
1.Higher prices for consumers as they’re uinable to buy imports
2.Less choice
Give 2 Impact of protectionist policies on Consumers
1.Higher prices for consumers as they’re unable to buy imports
2.Less choice
Give 3 impacts of protectionist polices on Producers
- Domestic producers can sell at a higher prices
- Suffer from higher costs if there’s controls on the imports they need for production
- Foreign procuers are limitied to where they can sell their goods.
Give 2 impacts of protectionist policies on Governments
- Tariff revenues and they are politically popular
2.Can lead to an inefficient economy which stifles domestic growth
What is an Arguement for Floating exchange rates
The use of floatin exhange rates mean that the centra bank doesn’t need to try to maintain a particular exhance rate and therefore won’t need to use reserves to buy pounds in the market to keep ita at the target.
What are 2 ways a governemnt can influence that value of their currency
- Manipulating Interest rates
- use gold can foregin currency reserves.
What are 2 measures of international competitiveness
- Relative Unit Labour costs
- Relative export prices
What are 5 factors that influence international competitiveness
1.Exchange rates
2. Productivity
3.Regulation
4.Investment
5.Taxation
