4.1 Globalisation Flashcards
(26 cards)
What is GDP per capita?
Total GDP / population
- Estimated average economic output per person in a country
- Indicator of standard of living
-Market size
- Purchasing power
What are literacy rates?
The percentage of the population that can read and write
What do literacy rates show?
- Education levels
- Level of development and progress within a society
- Offshoring
- Quality of workers
What does the health indicator show?
- Life expectancy rates
- Workforce productivity
- Potential of the market
What is HDI?
Used to examine economic development in a country
- 0-1
What are exports?
Selling goods and services in a foreign market
What are imports?
Buying goods or services from a foreign market for sale in the importers domestic market
What is specialisation?
When countries focus on producing goods they have a comparative advantage in while importing goods that other countries can produce more efficiently
What does specialisation lead to?
- Competitive advantage focusing on the goods you are skilled at
- Leading to lower ACPU
- EOS
- Improved quality and innovation
What is FDI?
Investment made by a company from one country into another country
Why you would use FDI?
- Access to new markets
- Access to resources (labour and RM)
- New partners
What is globalisation?
The increasing trend for markets to be international in scope rather than domestic
What is a tariff?
A tax on an imported goods that overseas firms looking to sell in a nation have to pay
What is protectionism?
Governments introducing policies to try and protect domestic firms inside their nation at the expense of overseas companies
Why protectionism is introduced by governments?
- Protect jobs in domestic country
- Protects emerging industries
- Raises gov revenue
- Encourage demand
- Prevent ‘ dumping ‘
What is the impact of tariffs on overseas markets?
- Costly
- Smaller profit margins
- Charge higher prices allowing domestic firms to be more price competitive
What is a quota?
A limit as to the amount of imported goods that are allowed in a time period
What are technical barriers to trade?
Standards that are introduced for goods being sold inside a country
- Costs to overseas firms
What are the positive impacts of protectionism on domestic firms?
- Aid their competitiveness (price)
- Increasing demand and revenues
What are the negative impacts of protectionism on domestic firms?
- Relying on raw materials that are imported from abroad
- Increasing costs from tariffs
What are the impacts of protectionism on overseas firms?
- Exempt from protectionist policies if producing in that nation
- No tariffs or subject to quotas
- Still costly, overseas firms must be confident that market is lucrative enough
What is a trading bloc?
A group of nations that have agreed to reduce or remove protectionist policies between them
What is FTA
Free trade agreement to remove tariffs and trade barriers on most or all goods traded between them
Factors to consider when entering a trade bloc?
- Where to produce
- Infrastructure
- Labour costs
- Consumer preferences
