Topic 1- International economic integration

Question 1

Globalisation

Answer 1

The integration between different countries and economies, and the increased impact of international influences on all aspects of life and economic activity.

Question 2

Gross World Product (GWP)

Answer 2

The aggregate value of all goods and services produced worldwide each year in the global economy, or the sum of all individual countries’ Gross Domestic Product.

Question 3

International business cycle

Answer 3

Refers to the fluctuations in the level of global economic activity over time.

Question 4

International division of labour

Answer 4

How the tasks in the production process are allocated to different people in different countries around the world.

Question 5

Portfolio investment

Answer 5

Involves purchasing less than 10% of the shares in a foreign company or purchase/sale of foreign bonds.

Question 6

Purchasing power parity

Answer 6

States that exchange rates should adjust to equalise the price of identical goods and services in different economies throughout the world.

Question 7

GDP

Answer 7

The total market value of all final goods and services produced in a country over a given period (usually 1 year, but also calculated quarterly).

Question 8

Regional business cycle

Answer 8

Refers to the fluctuations in the level of economic activity within a specific geographic region.

Question 9

Transnational corporations

Answer 9

Companies that have production facilities located around the globe.

Question 10

Foreign direct investment

Answer 10

The movement of funds between economies for the purpose of establishing a new company or buying a substantial proportion of shares in an existing company.