Economics Unit 3 0.0 / 5 ? EconomicsEconomicsGCSEOCR Created by: Chris00Created on: 31-01-17 18:47 Globalisation Expansion of world trade in goods and services leading to greater international interdependence 1 of 26 Factors that affect globalisation Improvements in transportation, improvement in communication technology, rising real living standards, decline in protection, economies of scale 2 of 26 Multinational company A company that has operations all over the world e.g. Apple 3 of 26 Absolute advantage When a country is able to provide a good or service using fewer resources and at a lower cost than another country 4 of 26 International trade The exchange of goods and services across international boundaries 5 of 26 Global interdependence The mutual reliance of countries on each other 6 of 26 Externalities An effect of trade which affects outside parties e.g. pollution 7 of 26 Free trade Trade without protectionism policies and regulations designed to reduce or prevent trade between nations 8 of 26 WTO - World Trade Organisation Responsible for increasing free trade between nations 9 of 26 Imports / Exports The buying/selling of goods into/out of a country 10 of 26 Protectionism When an action is taken that reduces international trade 11 of 26 Tariff Tax placed on imports to increase the price and reduce the quantity demanded 12 of 26 Quota Physical limit on the number of goods imported into a country 13 of 26 Embargo Ban on the import of a good or service 14 of 26 Regulations Adding a variety of rules in an attempt to limit/reduce imports 15 of 26 Single market The economies of different countries can be treated as one when a firm is considering it's domestic market 16 of 26 Customs union A group of countries which have free trade between members, but have a common external barrier 17 of 26 Single currency Group of countries have the same currency and monetary policy 18 of 26 Balance of payments Records all money coming into and flowing out of a country in a year 19 of 26 Components of a current account Trade in goods, Trade in services, Investment income, Current transfers 20 of 26 Balance of trade Consists of trade in goods and trade in services (calculated by doing exports - imports) 21 of 26 Balance of payments surplus Exports > Imports 22 of 26 Balance of payments deficit Imports > Exports 23 of 26 Exchange rate The value of one currency expressed in terms of another 24 of 26 Floating exchange rate Where the prices of two currencies are decided by market forces (Demand and supply) 25 of 26 Fixed exchange rate Where the central bank of a country tries to decide on the price of a currency 26 of 26
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