unit 4 key terms

Question 1

globalisation

Answer 1

growth of international trade that has made an increasing no of markets global rather than national

Question 2

GDP

Answer 2

value of goods and services produced within an economy over a specified period of time

Question 3

balance of payments

Answer 3

imports = exports

Question 4

balance of payments deficit

Answer 4

imports outweigh exports

Question 5

fixed capital formation

Answer 5

economists way of saying investment in long term assets such as roads or buildings

Question 6

invisible export

Answer 6

the sale of a service to an overseas customer

Question 7

purchasing power of parity

Answer 7

adjustment income levels to allow for differences in the cost of living

Question 8

trading bloc

Answer 8

a regional grouping of countries agreeing to free trade and sometimes free movement of labour

Question 9

inward foreign direct investment

Answer 9

investment into a country such as UK from companies abroad

Question 10

outward foreign direct investment

Answer 10

investment from a country such as UK

Question 11

saturated market

Answer 11

one where everyone who wants a product has it so sales can stabilise or slip

Question 12

liberalisation

Answer 12

minimising rules and regs faced by a business

Question 13

counter - cyclical

Answer 13

expansionary govt policies to counter a downturn in the economic cycle

Question 14

structural unemployment

Answer 14

potentially long term unemployment as a fundamental economic shift makes an industry and therefore the skills if its work place obsolete

Question 15

trade war

Answer 15

economic battle between 2 countries based entirely on protectionist measures such as import quotas

Question 16

home market

Answer 16

no of customers that can be reached without needing to jump administrative hurdles

Question 17

single market

Answer 17

dismantling trade barriers within Europe so that all 28 countries can treat the hole region as their home market

Question 18

pull factors

Answer 18

positive factors overseas that entice a UK business o look outside the UK

Question 19

push factors

Answer 19

negative factors within the UK that push a UK business to look overseas

Question 20

outsourcing

Answer 20

contracting another business to perform a business function on your behalf

Question 21

disposable income

Answer 21

household earnings minus direct taxes such as income tax and national insurance

Question 22

multinational

Answer 22

a company based in one country but with operations in many

Question 23

backwards vertical takeover

Answer 23

buying a business in the same industry but at an early stage in the supply chain

Question 24

joint venture

Answer 24

legal agreement between 2 countries to work together on a specific project

Question 25

appreciating

Answer 25

the value of a currency increases

Question 26

capital productivity

Answer 26

the efficiency within which capital is used

Question 27

depreciation

Answer 27

value of a currency falls

Question 28

poaching labour

Answer 28

hiring staff trained by others