Theme 3 Flashcards
what are employment patterns
the types of jobs people do, who employs people and how many people are employed at a given time
what is nominal value
the current price without taking into account inflation
what is the real value
the current price whilst taking into account inflation
what are exports
the selling of goods and services to other countries
what are imports
the buying of goods and services from other countries
what is trade liberalization
the removal or reduction of restriction or barriers such as tariffs on the exchange of goods between countries
what is integration
among nations to reduce or eliminate trade barriers
what is FDI
foreign direct investment - cross border investment in a separate economy from the country the investor is in
what is structural change
the move from one sector to another e.g. the primary sector to manufacturing or the secondary sector to services
what is horizontal FDI
the duplication of production facilities in different countries
what is vertical FDI
different stages of the production process occur in different countries
what are trading blocs
when the governments of a group of countries agree to trade together freely
what is trade creation
when trade shifts as a result of membership of a trading bloc from a high costs producer to low costs producer
what is trade diversion
when trade shifts as a result of membership of a trading bloc from a low cost producer to a high costs producer
what is a preferential trade area
members agree to either reduce or eliminate trade barriers for a select number of goods or services resulting in partial trade liberalization.
what is a free trade area
member agree to either reduce or eliminate trade barriers for all goods and services, resulting in trade liberalization
what is a customs union
members agree to the removal of trade barriers amongst themselves and a common approach to trade barriers when dealing with countries outside the bloc.
what is a common market
members agree to removal of trade barriers as well as the freedom of movement of factors of production within the bloc.
what is an economic union
includes both the features of a customs union and common market
what is protectionism
when a country takes action to protect its own industries by restricting trade with other countries
what is a comparative advantage
an economy’s ability to produce a particular good or service at a lower opportunity cost than its trading partners
what is an infant industry
when a young industry is unlikely to be able to compete against established MNC in developed countries thus require protection
what is dumping
when there is over production in a developed country and it maybe developed in a market of a developing nation which undercuts domestic prices and forces domestic producers to leave the market
what are import quotas
a physical limit on the volume of imports entering country
what is consumer surplus
the difference between the price a consumer is willing to pay for a product and the price they actually pay
what is producer surplus
the difference between the price a producer is willing to supply a product and the price actually received for the product
