Unit 3 Key Terms 0.0 / 5 ? EconomicsUnit 3GCSEOCR Created by: Emilyy11Created on: 27-04-14 12:42 Globalisation An expansion of world trade in goods and services leading to a greater international dependence. 1 of 23 Multinational company A company that has operations all over the world. 2 of 23 Specialisation Being better than another country at providing a good or service, in terms of the quantity of output and lower cost. 3 of 23 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 23 International trade The exchange of goods and services across international boundaries. 5 of 23 Free trade An absence of tariffs, quotas and regulations designed to reduce or prevent trade among nations. 6 of 23 Protection Where an action is taken that reduces international trade. 7 of 23 Tariff A tax placed in imports to increase the price and reduce the quantity demanded. 8 of 23 Single market The economies of different countries can be treated as one when a firm is considering its domestic market. 9 of 23 Customs union A group of countries, such as the EU, have free trade between members, but a common external barrier. 10 of 23 Single currency A group of countries agree to adopt the same currency and to have one monetary policy. 11 of 23 Current account The balance of trade in goods and services plus net investment incomes from overseas assets. 12 of 23 Balance of trade in goods The export of goods from the primary and secondary sector minus the import of these goods. 13 of 23 Balance of trade in services The export of tertiary sector services minus the import of these services. 14 of 23 Current account deficit The value of imports exceeds the value of exports. 15 of 23 Current account surplus The value of exports exceeds the value of imports. 16 of 23 Exchange rate How much of one currency needs to be given up to buy one unit of another currency. 17 of 23 Floating exchange rate Where the prices of two currencies are decided by market forces. 18 of 23 Fixed exchange rate Where the central bank of a country decide on the price of a currency. 19 of 23 International competitiveness The ability of companies to compete with companies from other countries. 20 of 23 Competitiveness The ability of a country to compete successfully internationally and maintain improvements in real output and wealth. 21 of 23 Foreign direct investment The investment by foreign countries in the production of goods and services in another country. 22 of 23 Absolute poverty On a world basis is defined as having less than $1.25 a day to live on. 23 of 23
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