Short Questions Unit 7 Flashcards
What is the formula for balance of trade
Exports - imports
Name an import in ireland which could not be substituted with a home produced good
coffee- Ireland has an unsuitable climate to grow coffee plants. We do not have the correct weather conditions
Explain import substitution
This means buying Irish goods instead of buying foreign goods. This increases sales for indigenous businesses in Ireland. Ex: Buying Irish potatoes instead of Spanish potatoes
Explain privatisation
This is when a state owned enterprise is sold to a private entrepreneur or business. The government no longer runs the company or has any say in how it’s run
Explain deregulation
This is gradually opening up more and more countries to international trade. It’s process of removing all the government rules and regulations that prevent free trade between countries
Explain the invisible exports and provide one example in Irish economy
These are services sold to a foreign country that brings money into Ireland. Ex: British tourists staying in a hotel in Dublin
Explain protectionism
When countries use barriers to trade to restrict foreign imports and/or increase their own exports to help their own indigenous businesses do well. They are imposed by the government ex: tariff
Explain your understanding of the term trading bloc
A trading bloc is a group of countries who make a formal agreement with each other to freely buy from and sell to each other without any barriers to trade Ex: European union
Illustrate what is meant by the term invisible imports with reference to the Irish economy
When Irish businesses and people buy services from foreign countries and money goes out of Ireland Ex: British singer performing in Ireland
Explain a Quota
A limit on the amount of foreign imports a country will allow. It is put in place to reduce the number of imports and to help indigenous businesses
Explain a tariff
A tax a country adds to the price of foreign goods to make them dearer so they will not sell as well
Explain the term open economy
An open economy is one which imports and exports freely with the rest of the world. A significant amount of income is earned from exports and spent on imports. It relys on international trade
Outline the possible impact of an open economy for irelands economic development
competition from foreign firms forces Irish businesses to keep their costs low so makes their businesses better and more competitive
Give two examples of trading blocs
European Union
North American Free Trade Agreement (NAFTA)
Explain inflation
The increases in the cost of living over a period of time
Who sets the bank interest rates for eurozone member
European Central Bank
When the euro increases in value against the dollar the price of irish exports in the Us will increase or decrease
increase
Who elects the EU commission
EU citizens
What does the Eurozone mean for goods and services
Free movement of goods, services, people and capital
Explain a directive
A law applicable to all EU member states that must be obeyed. It sets out a desired result to be achieved by a certain date. They must change their own laws to implement the directive.They have the freedom to change it slightly as long as required result is achieved
Who is the main decision making body of the EU
The council of the European Union
What bodies are in the co-decision procedure of the EU
European Parliament shares legislative power with the council of the European Union
Explain the role of the European commission
Upholds the interests of the EU as a whole. It manages day to day business like implementing policies or spending EU funds. Consists of commissioners each in charge of a different area
Explain a regulation in the context of the EU
An EU law all members must obey with immediate effect. This law takes absolute precedence over national law
