International economic issues (A level) Flashcards
Net errors and omissions
a figure included to ensure the balance of payments balances; sometimes called the balancing item
Expenditure switching policy
policy tools designed to encourage people to switch from buying foreign-produced products to buying domestically produced products
Expenditure reducing policy
policy tools designed to reduce imports and increase exports by reducing demand
Real exchange rate
a currency’s value in terms of its real purchasing power
Trade-weighted exchange rate
the price of one currency against a basket of currencies
Fixed exchange rate
an exchange rate set by the government and maintained by the central bank
Devaluation
a decision by the government to lower the international price of the country’s currency
Revaluation
a decision by the government to raise the international price of the country’s currency
Managed system
where the exchange rate is influenced by state intervention
Marshall-Lerner condition
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
J curve effect
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
Poverty cycle
the links between, for example, low income, low savings, low investment and low productivity
Development traps
restrictions on the growth of developing economies that arise from low levels of savings and investment
Purchasing power parity (PPP)
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
Measurable Economic Welfare (MEW)
a composite measure of living standards that adjusts GDP for factors that reduce living standards and factors that improve living standards
Multidimensional Poverty Index (MPI)
a composite measure of deprivation in terms of the proportion of households that lack the requirements for a reasonable standard of living
Kuznets curve
a curve that shows the relationship between economic growth and income inequality
Shadow economy
the output of goods and services hidden from the authorities
Demographers
people who study changes in the structure of human populations
Birth rate
the number of live births per thousand of the population in one year
Death rate
the number of deaths per thousand the population in one year
Infant mortality rate
the number of deaths of children aged under one per thousand live births in one year
Net migration
the difference between immigration and emigration
Natural increase in population
the number of live births exceeding the number of deaths
