THEME 4 DEFINITIONS Flashcards
OFFHSHORING
- MOVING BUSINESS FUNCTION
- ANOTHER COUNTRY TO LOWER COSTS
GDP PER CAPTITA
-MEASURE OF TOTAL OUTPUT OF COUNTRY’S ECONOMY
PURCHASING POWER PARTY
-ADJUSTMENT IN FACTORS IN DIFFERENCES IN COST OF LIVING
HUMAN DEVELOPMENT INDEX
- PROVIDE SINGLE MEASURE
- ECONOMIC DEVELOPMENT - INCOME, EDUCATION,HEALTH
FIXED CAPITAL FORMATION
- INVESTMENT IN LONG TERM ASSETS
- ROADS AND BUILDINGS
IMPORTS
- PRODUCT/SERVICE PRODUCED ABROAD
- CONSUMER DOMESTICALLY
EXPORTS
- PRODUCTS/SERVICE PRODUCED DOMESTICALLY
- CONSUMERD OVERSEAS
FDI
FOREIGN DIRECT INVESTMENT
-BUSINESS PURCHASES NON CURRENT ASSET IN ANOTHER COUNTRY
GLOBALISATION
- TREND
- CLOSER TIES
- ECONOMIES AND BUSINESSES WITHIN GLOBAL ECONOMY
ISOLATIONISM
- NATION TRADE POLICIES
- DESIGNED TO PUT INTEREST OF DOMESTIC BUSINESS FIRST
- IMPOSE TRADE BARRIER = HAMPER IMPORTS
TRADE LIBERALISATION
REMOVAL OF TRADE BARRIERS
PROTECTIONISM
- GIVING PREFERENCE TO DOMESTIC PRODUCERS
- MAKE IT HARDER FOR FOREIGN COMPANIES
- TO EXPORT TO YOUR COUNTRY
TARIFF
TAX IMPOSED ON IMPORT
ALLOW IT TO ENTER
QUOTA
PHYSICAL LIMIT ON VOLUME OF PRODUCT THAT CAN BE IMPORTED IN YEAR
QUOTA USED = ONLY DOMESTICALLY PRODUCED
SUBSIDY
- PAYMENT MADE BY GOVERNMENT
- TO BUSINESS PRODUCING CERTAIN PRODUCT/LOCATED IN PARTICULAR AREA
- GOV WISHES TO SUPPORT
TRADING BLOC
GROUP OF COUNTRIES
SIGN UP TO FREE TRADE BETWEEN THEM
-PROTECTED BY TARIFF WALL AGAINST IMPORTS FROM OUTSIDE
DUMPING
SELLING OF EXCESS PRODUCTION IN FOREIGN MARKET (LOW PRICE)
DESTROY LOCAL SALES
PUSH FACTOR
DRIVING FIRM AWAY FROM DOMESTIC MARKET
PULL FACTOR
ATTRACT BUSINESS TO NEW FOREIGN MARKET
DISPOSABLE INCOME
MONEY AVAILABLE TO SPEND
AFTER INCOME TAX DEDUCTED
LABOUR VS CAPITAL INTENSIVE
LABOUR: PROCESS RELIES MORE ON PEOPLE
CAPITAL: RELIES MORE ON MACHINERY
MULTINATIONAL COMPANY
BRANCHES OR MANUFACTURING PLANTS IN SEVERAL COUNTRIES (2 OR MORE)
TRANSFER PRICING
TECHNIQUE USED BY MULTINATIONALS
ADJUST THE INTERNAL PRICES PAID BY 1 BRANCH OF OPERATIONS TO ANOTHER
WAY OF MINIMISING TOTAL TAX BILL PAID
TAX AVOIDANCE
