3.1 Globalisation Flashcards Preview

Economic topic by topic theme 2-3 > 3.1 Globalisation > Flashcards

Flashcards in 3.1 Globalisation Deck (51)
Loading flashcards...
1

Define globalisation

The increased interconnectivity of nations on a global level, both economically and politically

2

How many people has the growth of China lifted out of poverty?

800 million

3

How can globalisation be negative for a firm?

Increased competition

4

Define real value

A measure of the value of money with the effect of inflation removed

5

Define nominal value

A measure of the value of money including inflation

6

What's the formula for Real Value?

Nominal Value
----------------------- (x100%)
Price Index

7

Why is it important to use real values when analysing market data from different countries?

Different countries have different taxes

8

What's the formula for index number?

Current value
--------------------------- (x100%)
Base Year Value

9

Give 4 advantages of the emergence of the BRIC economies on UK business

- Outsourcing
- New markets
- Cheaper raw materials
- Tourism industry will increase

10

Define specialisation

When a business, country or region focus on the production of a limited range of goods and services

11

Give 3 advantages to a business of specialisation

- Boost productivity and sales
- Increase the quality of good/service
- Induces investment

12

Give 2 potential disadvantages of specialisation to a business

- Risk isn't spread
- Footloose multinationals could move to cheaper countries

13

Define trade liberalisation

The process of reducing trade barriers to induce free trade

14

Define trade barrier

An umbrella term for things that make trade more difficult

15

Define tariff

A tax on imports

16

Define quota

A limit on import

17

Define subsidy

A government payment to reduce business costs and boost output

18

Give the 6 reasons as to why trade liberalisation has increased

- WTO
- Rise of MNCs
- Political change
- Technology advancements
- Specialisation
- Globalisation

19

Give 3 benefits to the world economy of trade liberalisation

- Countries can benefit from their comparative advantage
- Reduces overproduction
- Allows firms to operate at their most productive

20

Give 2 ways in which trade liberalisation can hinder the individual economy of countries

- Increased competition can bankrupt countries
- Prevents governments protecting infant industry with protectionist policies

21

Define FDI

Capital investment from one economy to another

22

Between what type of countries is FDI highest?

Developed countries

23

Define trade bloc

A group of countries who have an agreement for free trade

24

Which type of trade bloc offers no trade barriers between member countries alongside separate policies for trade with external nations?

Free Trade Area

25

Which type of trade bloc offers no trade barriers between member nations but a single policy that covers external nations?

Customs Union

26

Which type of trade bloc offers no trade barriers between member nations with a single policy that covers external nations and the free movement of people?

Common Market

27

What type of trade bloc offers the removal of all barriers to the movement of goods, labour and capital?

Single market

28

What is ASEAN?

A free trade area between:
Indonesia
Malaysia
Philippines
Singapore
Thailand

29

What is NAFTA?

A free trade area between:
Canada
USA
Mexico

30

Give 5 advantages of a country being in a trading bloc

- Exports increase, boosting AD
- Cheaper imports
- Risk is spread
- Attracts FDI
- Competition makes their businesses more efficient

31

Give 3 disadvantages of a country being in a trading bloc

- Unethical firms can struggle with regulations
- No government revenue from tariffs
- External tariffs can increase the cost of raw materials

32

Define protectionism

Government protection of home infant industry by controlling imports with tariffs

33

Give 4 examples of non-tariff trade barriers

- Packaging standards
- Quota
- Import ban
- Quality Conditions

34

Give 4 reasons for protectionism

- Incubate infant industry
- Response to import dumping
- Employment protection
- Raise government revenue

35

Define import dumping

A country subsidising its goods so low that it injures industry

36

Draw the Diagram for a tariff

See book

37

What Is the potential downside of a tariff?

Retaliation

38

Draw the diagram for a quota

See book

39

What is the WTO?

An international organisation that aim to create free trade

40

Give 3 advantages of the WTO on countries' business

- Avoids trade wars
- Creates new trade opportunities
- Encourages competitiveness

41

Give 3 disadvantages / evaluation points about the WTO

- Questions over their actual power
- Stops protectionism
- Unfavourable to poor countries

42

What is the G20?

A group of the 20 richest countries in the world who gather to protect industry and create global financial stability

43

What is the IMF?

A body who provide advice and loans to struggling countries

44

What do the World Bank do?

Encourage development in poor countries through finance and advice

45

What is meant by a bilateral trading agreement?

Trade between just 2 economies

46

What is meant by a multilateral trading agreement?

Trade between more than 2 economies

47

How does appreciation impact the BOP?

Imports increase
Exports decrease
-------------------------
BOP decreased

48

What does appreciation do to employment levels?

Reduces them

49

What is the eurozone?

The use of a single currency between groups of countries

50

Why is there no manipulation of the exchange rate in the Eurozone?

There is a single currency

51

Why can the Eurozone be very bad?

If one country becomes less competitive, it can be difficult for them to use the same currency as a booming country