Unit 5 Flashcards
What is relative poverty
When individuals cannot afford things CONSIDERED part of normal life in their society. E.g a holiday abroad
What is absolute poverty
When individuals cannot afford things REQUIRED for an ADEQUATE standard of living
What is the poverty line
The minimum amount of income required in order to have and adequate standard of living
What is an LEDC
And less economically developed country with a relatively low standard of living that lacks the capacity to produce manufactured goods
What is trade
When economies benefit from exchanging goods.
What benefits of trade
Creates jobs, LEDC sells products to other countries, increases access to a range of goods, cheaper process of products and it encourages investment and growth
What are the drawbacks of trade
Resource depletion, exploitation, corruption of government and dependence on one industry
What are non tariff barriers
Laws and regulations put in place to make it difficult for companies from selling in other countries by raising their costs
What are quotas
A limit on the number of items alowed into a country over a period of time
What are tariffs
A tax on importing goods paid by the producer so they have to charge more making them uncompetitive
What are subsidies
Money given by government in its own country that allows it to sell products cheaper than other companies
What is a single European market
when the economies in Europe operate as one with NO trade restrictions.
What is put in place to help the other economies
No non tariff barriers for electrical goods and car safety
no protectionism on people so they can work anywhere in the EU.
How does the single currency effect trade
Removes fluctuations in exchange rate
Makes planning ahead easier
Makes prices more transparent
Reduces costs of exchanging currencies
What are the benefits of the single market for businesses who import raw materials
No difference in prices
It is a quicker transaction
No tariffs
No non tariff barriers
