4.1-International Economies Flashcards
What are the characteristics of Globalisation
1.Increased Interconnectedness: Globalisation involves heightened connectivity and interdependence among countries and regions.
2.Cross-Border Flows:
It encompasses the movement of goods, services, capital, information, and people across borders.
3.Technological Advances: Technological innovations, especially in communication and transportation, facilitate global interactions.
4.International Trade:
Globalisation fosters extensive international trade, with goods and services exchanged on a global scale.
Factors Contributing to Globalisation
1.Technological Advances:
The advent of the internet, telecommunications, and efficient transportation.
2.Trade Liberalisation:
Reduction of barriers to trade through agreements and policies.
3.Investment and Capital Flows: Increased movement of capital across borders.
4.Cultural Exchange:
Enhanced communication leads to the sharing of ideas and cultural influences.
5.Political Changes:
Shifts in political ideologies and policies favoring global cooperation.
What is the impact of Globalisation
1.Economic Growth:
Access to larger markets and resources can stimulate economic growth.
2.Increased Trade: Nations engage in extensive trade, contributing to economic development.
3.Cultural Homogenization and Diversity: While there’s increased cultural exchange, concerns arise about the potential loss of cultural diversity.
4.Income Inequality: Globalisation can exacerbate income inequality within and between countries.
5.Environmental Challenges: Intensive global trade may contribute to environmental degradation.
What is a Multinational Corporation
Operate in multiple countries, influencing global economies.
What is a Global Supply chain?
Companies source materials and components globally, creating interconnected supply networks.
What is a Comparative advantage?
when one country can produce a good or service at a lower opportunity cost than another.This means a country can produce a good relatively cheaper than another
What is an absolute advantage ?
Economy can produce a good for a lower cost than another.It means that less resources are needed to produce the same amount of goods
What is Specialisation?
When a country focuses on productivity one or a narrow range of goods/ services
How do you measure international competitiveness
Relative unit labor costs and export prices
What are the components of the Balance of payments?
Current account, capital account, and financial account.
what is the Balance of Payments?
Record of all international transactions between countries, consists of a current account ,financial account,capital account
What is the Current Account
which record the transactions of a country’s capital markets, industries, services, and governments.
What are the four components of the current account?
1.Balance of trade in goods. Tangible items are recorded here.
2.Balance of trade in services. Intangible items like tourism are recorded here.
3.Net income flows (primary income flows). Wages and investment income are examples of what would be included in this section.
4.Net current account transfers (secondary income flows). Government transfers to the United Nations (UN) or European Union (EU) would be recorded here.
What is the financial account?
includes transactions that result in a change of ownership of financial assets and liabilities between UK residents and non-residents (FDI)
What is the capital account
sale/transfer of patents,copyright franchises, leaves and other transferable contract
(example would be international buying and selling of land by businesses
