Economics unit 3 key terms

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Globalisation
Globalisation is the integration of countries through increasing amounts of trade.
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Multinational Company
A comapany that has its headquarters based in one country (usually a developed economy) and its other operations all over the world.
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Absolute Advantage
When a company is able to provide a good or service using fewer resources and at a lower cost than another country.
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International Trade
The exchange of goods and services across international boundaries.
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Free Trade
Trade between countries without protectionist policies, no tariffs and quotas.
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Protection
Where an action is taken that reduces international trade.
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Tariff
A tax placed on imports to increase the price and reduce the quantity demanded.
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Embargo
A ban on the import of a good or service.
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Regulations
Where countries try to limit imports through a variety of rules.
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Quota
A physical limit on the number of goods imported into a country. This reduces quantity supplied so that price increases and quantity demanded falls.
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Single Market (EU)
The economies of different countries can be treated as one when a firm is considering its domestic market.
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Customs Union (EU)
A group of countries, such as the EU, who have free trade between members, but a common external barrier.
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Single Currency (Eurozone)
A group of countries agree to adopt the same currency and to have one monetary policy.
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Current Account
The balance of trade in goods and services plus net investment and incomes from overseas assets.
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Balance of Trade In Goods
The export of goods from the primary and secondary sectors minus the import of these goods.
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Balance of Trade In Services
The export of tertiary sector minus the import of these services.
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Current Account Deficit
The value of imports is greater than the value of exports for a country.
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Current Account Surplus
The value of exports is greater than the value of imports for a country.
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Exchange Rate
The value of one currency in terms of another currency.
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Floating Exchange Rate
Where the prices of two currencies are decided by market forces.
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Fixed Exchange Rate
Where the central bank of a country tried to decide on the price of a currency.
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International Competitiveness
The ability of companies to compete with companies from other countries.
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Competitiveness
The ability of a country to compete successfully internationally and maintain improvements in real output and wealth.
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Foreign Direct Investment
The investment by foreign companies in the production of goods and services in another country.
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Absolute Poverty
Living on less than $1.25 a day. Unable to afford the basic necessities such as food, shelter and clothing.
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Relative Poverty
Relative poverty is when people are poor compared with most people/the average person in a country. It is defined as an income of less than 60% of the median income.
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International Monetary Fund
The International Monetary Fund is an organisation of 188 countries, working to secure financial stability and facilitate international trade. They offer loans and bailouts to countries in need.
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World Bank
The World Bank is an organisation set up to support developing economies by offering financial and technical assistance. It's two aims are to reduce poverty and increase prosperity in the world's poorest economies.
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Specialisation
Where a worker/firm/region/country concentrates on producing a narrow range of goods and services.
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Bailout
An act of giving financial assistance to a failing economy to save it from collapse. This could be in the form of loans or grants.
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Austerity
A time of difficult economic conditions created by government measures to reduce a budget deficit, especially by reducing public expenditure.
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High External Debt Burden
A high level of debt, compared to GDP, owed to other countries.
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Austerity Program
A set of policies with the aim of reducing government budget deficits by reducing government spending.
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Export
A good or service produced in the UK and sold abroad, the money received enters the UK.
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Import
Imports are goods and/or services provided by a company based overseas and sold to residents of the EU/UK.The profit goes back to the country of origin.
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Subsidy
A subsidy is a payment to a firm by the government, to increase production and reduce price.
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Absolute Advantage
Absolute Advantage is when a country produces a good/service with fewer resources and at a lower cost.
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Other cards in this set

Card 2

Front

A comapany that has its headquarters based in one country (usually a developed economy) and its other operations all over the world.

Back

Multinational Company

Card 3

Front

When a company is able to provide a good or service using fewer resources and at a lower cost than another country.

Back

Preview of the back of card 3

Card 4

Front

The exchange of goods and services across international boundaries.

Back

Preview of the back of card 4

Card 5

Front

Trade between countries without protectionist policies, no tariffs and quotas.

Back

Preview of the back of card 5
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