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Economics > International economic issues (A level) > Flashcards

International economic issues (A level) Flashcards

1
Q

Net errors and omissions

A

a figure included to ensure the balance of payments balances; sometimes called the balancing item

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2
Q

Expenditure switching policy

A

policy tools designed to encourage people to switch from buying foreign-produced products to buying domestically produced products

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3
Q

Expenditure reducing policy

A

policy tools designed to reduce imports and increase exports by reducing demand

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4
Q

Real exchange rate

A

a currency’s value in terms of its real purchasing power

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5
Q

Trade-weighted exchange rate

A

the price of one currency against a basket of currencies

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6
Q

Fixed exchange rate

A

an exchange rate set by the government and maintained by the central bank

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7
Q

Devaluation

A

a decision by the government to lower the international price of the country’s currency

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8
Q

Revaluation

A

a decision by the government to raise the international price of the country’s currency

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9
Q

Managed system

A

where the exchange rate is influenced by state intervention

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10
Q

Marshall-Lerner condition

A

the requirement that for a fall in the exchange rate to be successful in reducing a current account deficit, the sum of the price elasticities of demand for exports and imports must be greater than 1

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11
Q

J curve effect

A

a fall in the exchange rate causing an increase in a current account deficit before it reduces it due to the time it takes for demand to respond

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12
Q

Poverty cycle

A

the links between, for example, low income, low savings, low investment and low productivity

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13
Q

Development traps

A

restrictions on the growth of developing economies that arise from low levels of savings and investment

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14
Q

Purchasing power parity (PPP)

A

a way of comparing international living standards by using an exchange rate based on the amount of each currency needed to purchase the same basket of goods and services

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15
Q

Measurable Economic Welfare (MEW)

A

a composite measure of living standards that adjusts GDP for factors that reduce living standards and factors that improve living standards

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16
Q

Multidimensional Poverty Index (MPI)

A

a composite measure of deprivation in terms of the proportion of households that lack the requirements for a reasonable standard of living

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17
Q

Kuznets curve

A

a curve that shows the relationship between economic growth and income inequality

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18
Q

Shadow economy

A

the output of goods and services hidden from the authorities

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19
Q

Demographers

A

people who study changes in the structure of human populations

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20
Q

Birth rate

A

the number of live births per thousand of the population in one year

21
Q

Death rate

A

the number of deaths per thousand the population in one year

22
Q

Infant mortality rate

A

the number of deaths of children aged under one per thousand live births in one year

23
Q

Net migration

A

the difference between immigration and emigration

24
Q

Natural increase in population

A

the number of live births exceeding the number of deaths

25
Q

Positive net migration

A

more people coming to live in the country than people leaving the country to live elsewhere. It can also be referred to as net immigration

26
Q

Net migration rate

A

the number of migrants per thousand of the population in one year

27
Q

Dependency ratio

A

the proportion of the economically inactive compared to the labour force

28
Q

Optimum population

A

the size of population that maximises GDP per head

29
Q

Lorenz curve

A

a diagram illustrating the extent of income or wealth inequality

30
Q

Primary sector

A

industries involved in farming and extracting natural resources

31
Q

Secondary sector

A

industries that manufacture products

32
Q

Tertiary sector

A

industries that produce services

33
Q

International Monetary Fund (IMF)

A

an international organisation that promotes free trade and helps countries in balance of payments difficulties

34
Q

Aid

A

assistance given to other countries on favourable terms

35
Q

Tied aid

A

aid with conditions attached

36
Q

Untied aid

A

aid without conditions attached

37
Q

Bilateral aid

A

aid given by one country to another country

38
Q

Multilateral aid

A

aid given by international organisations to a country or countries

39
Q

Virtuous cycle

A

the links between, for example, an increase in investment, increase in productivity, increase in income and increase in saving

40
Q

Emerging economies

A

economies that are making quick progress towards becoming high-income economies

41
Q

Foreign direct investment (FDI)

A

the setting up of production units or the purchase of existing production units in other countries

42
Q

Globalisation

A

the process by which the world is becoming increasingly interconnected through trade and other links

43
Q

Trade bloc

A

a regional group of countries that have entered into trade agreements

44
Q

Free trade area

A

a trade bloc where member governments agree to remove trade restrictions among themselves

45
Q

Customs Union

A

a trade bloc where there is free trade between member countries and a common external tariff on imports from non-members

46
Q

Monetary union

A

a trade bloc which involves member countries operating the same currency, having one exchange rate and the same interest rate

47
Q

Full economic union

A

a trade bloc where there is free trade between member countries, a common external tariff, common economic policies and the same currency.

48
Q

Trade creation

A

where high-cost domestic production is replaced by more efficiently produced imports from within the customs union

49
Q

Trade diversion

A

where trade with a low-cost country outside a customs union is replaced by higher-cost products supplied from within the customs union

Economics (11 decks)

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