Theme 3 - Growing economies

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  • Created by: becky.65
  • Created on: 12-02-18 09:41
In the 1960s, which countries economies began to grow at a rate not previously seen before?
South Korea, Taiwan, Hong Kong and Singapore
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Why did China begin to engage in international trade in 1980?
In hope of raising incomes
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What happened in Russia in 1989?
The Communist USSR collapsed and they began to increase trade with the rest of the world
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What did the Indian government do in the 1990s?
Reform its policies to increase trade
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By 2000, how were emerging economies industrialising fast?
People who had worked in the agricultural sector moved to cities where jobs were available and in the manufacturing sector, labour productivity was rising fast
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How did emerging economies continue to grow even during the financial crisis?
Rapid increases in the volume of trade as their products tended to be the cheapest
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In China, how is growth starting to slow?
Their growth was based partly on high levels of investment, some of which was not profitable so China needed to rebalance its economy after 2009 and encourage more consumer spending
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What happened to Russia and Brazil's growth in 2014?
Both commodity and oil prices fell, so GDP fell in Russia as it is a major oil exporter. Brazil found its once high revenue from agricultural and mineral commodity prices declining fast
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What did the slow growth after 2009 cause?
A reduced demand for imports, especially in the Eurozone
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Why might patterns of trade change?
In some countries, public opinion may shift towards protectionism even though this would reduce real income, Brexit, new technologies may lead to less offshoring, ageing populations may need more services and fewer manufacturers, political changes
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What does economic growth imply?
Dynamism in both labour and product markets
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What are some ways businesses can stay price competitive?
Economies of scale, productivity, offshoring, outsourcing and cost leadership
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When might businesses use non-price competition?
When they are facing competition from other developed economies
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What are some ways businesses can stay non-price competitive?
Branding, reputation, design, reliability, advertising and packaging
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How does offshoring help emerging economies?
It provides strong demand for manufacturers and a ready supply of cheap labour keeps them competitive. Over time, economic growth leads to rising incomes and higher labour costs
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What does offshoring also encourage?
It encourages mergers and takeovers as these create scope for economies of scale and access to new markets. Businesses that merge and then rationalise will shut down departments that duplicate work and cut costs
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What is rationalisation?
It involves reorganising production to achieve efficiency and use fewer resources to get the same output
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Who are the gainers from globalisation in developed economies?
Employees working in firms that export successfully and people with scarce skills
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Who are the losers from globalisation in developed economies?
Employees who have few skills working in firms that cannot compete with imports and close down
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Who are the gainers from globalisation in emerging economies?
People who move from farm work work to manufacturing, especially if they benefit from training
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Who are the losers from globalisation in emerging economies?
People without scarce skills who have little bargaining power and poor working conditions
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What is nominal value?
Value at current prices
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What are current prices?
Data given at the price level in the year concerned
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What are real values?
Money values with the effect of inflation removed
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What are constant prices?
Prices that would have been in use if there had been no inflation
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How do you calculate real value?
(Nominal value x 100) / Price index
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How do you calculate index numbers?
(Current value / Base year value) x 100
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Why are index numbers very important?
You can compare inflation rates, exports or investment in different economies. Or you can compare different sectors in one specific economy
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Other cards in this set

Card 2

Front

Why did China begin to engage in international trade in 1980?

Back

In hope of raising incomes

Card 3

Front

What happened in Russia in 1989?

Back

Preview of the front of card 3

Card 4

Front

What did the Indian government do in the 1990s?

Back

Preview of the front of card 4

Card 5

Front

By 2000, how were emerging economies industrialising fast?

Back

Preview of the front of card 5
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