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
Positive net migration
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
Net migration rate
the number of migrants per thousand of the population in one year
27
Dependency ratio
the proportion of the economically inactive compared to the labour force
28
Optimum population
the size of population that maximises GDP per head
29
Lorenz curve
a diagram illustrating the extent of income or wealth inequality
30
Primary sector
industries involved in farming and extracting natural resources
31
Secondary sector
industries that manufacture products
32
Tertiary sector
industries that produce services
33
International Monetary Fund (IMF)
an international organisation that promotes free trade and helps countries in balance of payments difficulties
34
Aid
assistance given to other countries on favourable terms
35
Tied aid
aid with conditions attached
36
Untied aid
aid without conditions attached
37
Bilateral aid
aid given by one country to another country
38
Multilateral aid
aid given by international organisations to a country or countries
39
Virtuous cycle
the links between, for example, an increase in investment, increase in productivity, increase in income and increase in saving
40
Emerging economies
economies that are making quick progress towards becoming high-income economies
41
Foreign direct investment (FDI)
the setting up of production units or the purchase of existing production units in other countries
42
Globalisation
the process by which the world is becoming increasingly interconnected through trade and other links
43
Trade bloc
a regional group of countries that have entered into trade agreements
44
Free trade area
a trade bloc where member governments agree to remove trade restrictions among themselves
45
Customs Union
a trade bloc where there is free trade between member countries and a common external tariff on imports from non-members
46
Monetary union
a trade bloc which involves member countries operating the same currency, having one exchange rate and the same interest rate
47
Full economic union
a trade bloc where there is free trade between member countries, a common external tariff, common economic policies and the same currency.
48
Trade creation
where high-cost domestic production is replaced by more efficiently produced imports from within the customs union
49
Trade diversion
where trade with a low-cost country outside a customs union is replaced by higher-cost products supplied from within the customs union