The International Economy Deffinitons Flashcards
Absolute advantage
When an economy is able to produce greater quantity of output with the same quantity of input.
Aid
Transfer of resources between economies.
Bilateral aid
Aid given from one country to another.
Comparative advantage
When an economy is able to produce a greater quantity of output at a lower opportunity cost.
Debt relief
Partial or total forgiveness of debt slowing of debt growth.
Developed countries
Countries with high GDP per capita; tend to export manufactured
goods.
Developing countries
Countries with low GDP per capita; tend to export agriculture.
Economic development
Assessing the standards of living and economic welfare of those in a country.
Economic integration
The process by which economies become more closely linked.
Emerging countries
Countries that aren’t fully developed, yet are more developed thanLEDCs.
FDI
When firms in one country make investments into another country.
Free trade
Trade with no barriers or restrictions.
Globalisation
The process in which economies become increasingly interconnected and
markets become worldwide in scope.
HDI
Measures an economy’s development based on 3 main criteria; life expectancy, educational achievement, and living standards.
MNC
Multi-national corporation (MNC): Firms that operate in multiple countries.
Protectionism
When governments enact policies to restrict the free entry of imports into an
economy.
Quota
A limit on the amount of a good that can be imported into a country.
Sustainability
Meeting present-day needs without putting the future at risk.
Tariff
Form of tax placed on imported goods, making them less price competitive to disincentivise consumption.
Trade creation
Creation of trade between members within a bloc.
Trade diversion
Diversion of trade from between a country in a bloc and efficient countries
outside a bloc, to less efficient countries within a bloc.
Trade liberalisation
Reduction or removal of protectionist policies.
Trading block
Government agreements that promote trade between certain countries.
WTO
World Trade Organisation (WTO): International organisation that aims to make trade as free as possible, discussing trade agreements and settling trade disputes.
