International Trade Key Definitions Flashcards
What is HDI?
It is the Human Development Index. It combines literacy rate, life expectancy and income per capita. A high HDI shows a high level of development.
What is the Gini index? How has its value changed over time?
It is a measure of inequality within/between nations.
The World Gini Coefficient has increased from 0.43 in 1820 to 0.68 in 2005 showing inequality has increased.
Define an import license.
A license issued by a national government authorising the importation of goods from a specific source.
Define an import quota.
A physical limit on the quantity of goods that can be imported into the country.
Define subsidies.
These are grants or allowances usually awarded to domestic producers to reduce their costs and make them more competitive against imports.
Define a voluntary export restraint.
This is a diplomatic strategy offered by the exporting country to appease the importing country and deter it from opposing trade barriers.
Define a trade embargo.
It involves the partial or complete prohibition of commerce and trade with a particular country.
Define trade restrictions.
Import trade restrictions may be based on technical or regulatory obstacles such as the quality standards of goods being imported or how they are produced.
Define free trade.
The aim of the WTO, no barriers to trade so it can occur freely between all nations.
Define FDI.
Foreign Direct Investment is an investment made by a firm or individual in one country into business interests located in another country.
Define protectionism.
Putting barriers in place to reduce trade in order to maintain internal markets.
Define trade liberalism.
The encouragement to remove tariffs and barriers to trade.
Define outsourcing.
The movement of labour to developing nations to utilise their cheap labour and less stringent working conditions.
What is the demultiplier effect?
When people lose their jobs in manufacturing they have less money to spend so services are lost and the area goes into decline.
