key terms 4.1- Globalisation Flashcards
what is economic growth?
an increase in a country’s productive capacity
what are emerging economies?
the economies of developing countries where there is rapid growth but also significant risk
what is a human development index (HDI)?
a collection of statistics that are combined into an index, ranking countries according to their human development
what is a literacy rate?
the percentage of adults (over 15) that can read and write
what is a purchasing power parity (PPP)?
a measure of real growth that uses the price of purchasing a standardised basket of goods and services in order to compare prices across economies
what is comparative advantage?
the theory that a country should specialise in products and services that it can produce more efficiently than other countries
what is a competitive advantage?
the idea that a business should specialise in any area where it can perform better than its competitors
what is division of labour?
different workers specialising in different productive activities
what are exports?
goods or services that a firm produces in its home market but sells in a foreign market
what is a foreign direct investment?
investing by setting up operations or buying assets in businesses in another country
what are imports?
goods and services that are bought into one country from another
what is international trade?
exporting and importing
what is specialisation?
a production strategy where a business focuses on a limited scope of products or services.
what are tariffs?
taxes that are imposed on imports
what is a foreign direct investment (FDI)?
business investment undertaken by a firm in another country
what is globalisation?
the growing integration of the world’s econmoies
what are transnational/ multinational companies?
companies that own or control production or service facilities outside the country in which they are based
what is the world trade organisation (WTO)?
an international organisation that promotes free trade by persuading countries to abolish tariffs and other barriers.
what does the WTO do? (3)
- polices free trade agreements
- settles trade disputes between governments
- organises trade negotiations
what are administrative barriers?
rules and regulations that make it difficult for importers to penetrate an overseas market
what is dumping?
where an overseas firm sells large quantities of a product below cost in the domestic market
what are embargoes?
a complete ban on international trade
what is an import quota?
a physical limit on the number of imports allowed into a country
what are infant industries?
new industries that have yet to establish themselves
what is protectionism?
an approach used by a government to protect domestic producers
what is a subsidy?
financial support given to a domestic producer to help compete with overseas firms
what are tariffs/custom duties?
a tax on imports to make them more expensive
what are trade barriers?
measures designed to restrict rade
what s the common market?
a market where goods,labour and capital can move freely across the member states
what is the customs union?
a union where member states remove all trade barriers between themselves and members adopt a common set of barriers against non-members
what is an economic and monetary union?
an economic union that uses a common currency
what is an economic union?
ape of trade bloc involving both a customs union and a common market
what is a free trade area (FTA)?
a region where member states remove all trade barriers between themselves but each member state keeps different barriers against non-member states
what is a preferential trading area (PTA)?
a type of trading bloc where certain types of products from participating countries receive a reduced tariff rate
what is a regional trade agreement (RTA)?
agreement made between 2 or more countries within a geographical region, which is designed to facilitate trade by bringing down barriers
what are rules of origin?
a system of allocating certificates whereby a defined amount of a product or service must be certified as being created within that region
what is a single market?
a market where almost all trade barriers between members have been removed and common laws or policies aim to make the movement of goods and services, labour and capital between countries as easy as the movement within each country
what is a trading bloc?
a group of countries that has signed a regional trade agreement to reduce or eliminate tariffs, quotas and other protectionist barriers between themselves
