Single Market (8.1)

HideShow resource information

Single Market (8.1)

Single market: the economies of different countries can be treated as one when a firm is considering its domestic market.


  • Free movement of capital
  • Free movement of labour
  • Competition
  • Higher economic growth and standard of living
  • Specialisation and economies of scale


  • Job losses
  • Attract capital and jobs away from poorer countries
  • Manufacturing costs are attracted to low labour costs
  • MNCs drive out local firms
1 of 5

Single Currency (8.1)

Single Currency: a group of countries agree to adopt the same currency and to have one monetary policy


  • Elimination of exchange rate risks
  • Price transparency (easy to compare)
  • Transaction costs
  • Employment
  • Long-term planning
  • Single monetary policy


  • Sensitivity to interest rates
  • Recession
2 of 5

Protectionism (7.6)

Protectionism: where an action is taken that reduces international trade

  • Tariffs
  • Quota
  • Embargo
  • Regulations

Why protect some industries?

  • Infant industry
  • Dumping
  • Protect jobs
  • Prevent negative externalities
  • Political
3 of 5

The World Trade Organisation (7.4)

Free Trade: an absence of tariffs, quotas and regulations designed to reduce or prevent trade among nations.

What are the benefits of free trade?

  • More choice of goods at the lowest price possible
  • Increased competition encourages firms to innovate
  • Exports of goods and services will increase economic growth
  • Encourages efficiency
  • Increases world output and wealth
  • Prevents monopolies
4 of 5

Multinationals (7.2)

Multinational company: a company that has operations all over the world


  • Cheaper labour costs
  • Gaining a strong foothold in international markets
  • Ability to take advantage of the different strengths of many countries
  • Transport/ distribution costs
  • A favourable tax environment
  • Availability of government grants


  • Loss of jobs
  • Export of technology
  • Dependency on imports
  • Loss of tax revenue
5 of 5


No comments have yet been made

Similar Economics resources:

See all Economics resources »See all Single Market resources »