Globalisation- an expansion of world trade in goods and services leading to a greater international interdependence.
International trade- the exchange of goods and services across international borders.
Multinational Company- a compant who has operations all over the world.
Specialisation- being better than another country at providing a good or service, in terms of the quantity of output and lower cost.
Absolute Advantage- when a ountry is able to provide a good or service using fewer resources and at a lower cost than another country.
Free trade- as absence of tariffs, quotas and regulations designed to reduce or prevent trade among nations.
Protection- where an action is taken that reduces international trade.
Tariff- a tax placed on imports to increase the price and reduce the quantity demanded.
Quota- physical limit on the number of goods imported into a country. Either a percentage of the total market or a stated number.
Embargo- a ban on the import of a good or service
Regulations- a limit to an import of a good or service using a variety of rules.
Single Market- the economies of different countires can be treated as one when a firm is considering its domestic market.
Customs Union- a group of countries, such as the EU, have free trade between members, but a common external barrier.
Single Currency- a group of countries agree to adopt the same currency and to have one monetary policy.
Current account- the balance of trade in goods and services plus net investment income from overseas assests.
Balance of trade in goods- the export of goods from the primary and secondary sector minus the import of these goods.
Balnce of trade in services- the export of tertiary sector sevices minus the import of these services.
A deficit- when your expenditure (outgoings) is more than your revenue (income).
A surplus- when your revenue is more than your expenditure.
Current account deficit- the value of imports exceeds the value of exports.
Current account surplus- the value of exports exceeds the value of imports.
Exchange rate- how much of one currency is needed to buy one unti on another currency.
Floating exchange rate- where the prices of two currencies are decided by market forces.
Fixed exchange rate- where the central bank of a country tries to decide on the price of a currency.
International competitiveness- the ability of companies to compete with companies from other countries.
Competitiveness- the ability of a counrty to compete successfully internationally and maintain improvements in real output and wealth.
Foreign Direct Investment (FDI)- the investment by foreign companies in the production of goods and services in another country.
Absolute poverty- on a world basis defined as having less than $1.25 a day to live on.