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economics ial u4 > definition > Flashcards

definition Flashcards

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1
Q

Capital controls

A

Capital controls are measures taken by a government or central bank to regulate or restrict the flow of capital in and out of a country.

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2
Q

Containerisation

A

The use of containers, with standardised dimensions, in the transport of code

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3
Q

foreign direct investment

A

Flows of money between countries where one firm buys or set up another in another country

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4
Q

Greenfield FDI

A

When a farm in one country creates a farm in another country from scratch, or bills and extends the production capacity of an existing farm

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5
Q

Brownfield FDI

A

When a foreign company buys or leases existing facilities in a host country

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6
Q

Subsistence Farming

A

A type of agriculture where farmers grow food mainly for their own family’s consumption, not for sale or trade.

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7
Q

Cultural Homogenisation

A

where local cultures become more similar or replaced by a dominant global culture, often due to globalisation

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8
Q

Brownfield FDI

A

When a foreign company buys or leases existing facilities in a host country

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9
Q

Subsistence Farming

A

A type of agriculture where farmers grow food mainly for their own family’s consumption, not for sale or trade.

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10
Q

globalisation

A

The ever increasing integration of the world’s local, regional and national economies into a single international market

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11
Q

 multiplier effect

A

The increase in the final income arising from any new injection of spending, can be positive or negative

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12
Q

Protectionism

A

Government actions or policies that restrict international trade

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13
Q

regional trade agreement

A

An agreement between at least two countries to reduce or eliminate tariffs, quotas and other protectionist barriers

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14
Q

trade liberalisation

A

The move towards greater free trade through the removal of protectionist barriers of trade

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15
Q

trading bloc

A

A group of countries that have signed an agreement to reduce or eliminate tariffs, quotas, and other protectionist barriers

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16
Q

transnational/multinational company

A

A company with significant product operations in at least two countries

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17
Q

Economies of scale

A

A fall in the long run average cost of production as output rises

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18
Q

Exploitation

A

Using resources or labour hours without proper compensation

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19
Q

Redistribution of Income

A

The process by which a government alters the distribution of income in an economy to reduce inequality, usually through taxation and welfare spending.

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20
Q

tax avoidance

A

When an individual or farm deliberately manipulate the tax system to pay less than the fair amount

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21
Q

tax base

A

 refers to all the sources (the income and wealth) from which the government can collect taxes based on tax law

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22
Q

Tax Haven

A

A place where people go to live, or farms locate to avoid paying high taxes in their own country. Countries like Ireland and the UAE

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23
Q

Transfer pricing

A

An accounting technique used by TNCs to reduce taxes on profit by selling goods at a low price internally to subsidiaries from a high tax country to another part of the company in a low tax country so the subsidiary can sell at a higher profit in the low tax country

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24
Q

IP Shifting (Intellectual Property Shifting)

A

when multinational companies move ownership of intellectual property (IP) to low-tax countries to reduce their overall tax bill.

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25
absolute advantage
When one country can produce more of a good than another country using the same quantity of factor input, resources like labour land capital
26
comparative advantage
Occurs when a country can produce a good or service at a lower opportunity then another country. This means they have to give up producing less of another good than another country, using the same resources
27
Terms of trade
The rate at which one good is exchanged for another between countries in trade
28
David Ricardo's labour theory of value
all cost boil down to labour hours. Differences in competitive cost comes from differences in labour productivity.
29
specialisation
Where nations are not self-sufficient but concentrate on producing certain goods and services and trading the surplus with others
30
Patterns of trade
refers to the composition of exports, and imports and geological distribution of trade
31
Trade diversion
Refers to the negative impact on trade when countries join a free trade area or trading block, the switch from purchasing products from a low-cost producer to a high cost producer
32
bilateral trade agreement
an agreement between two countries or between a country and a trading block, which gives favourable trade agreements and reduces some barriers between the two
33
merchandise
Goods to be bought or sold
34
Index of times of trade
index of export prices / index of import prices * 100
35
terms of trade
The ratio of export prices to import prices
36
free trade area
A group of countries between which there is free trade in goods and services but where member countries are allowed to set their own level of tariff against non-member countries
37
customs union
A group of countries between which there is free trade in product and which imposes a common external tariff on imported goods from outside the market
38
common markets
A group of countries that not only have free trade within the trading blog and a common external tariff on goods from outside the bloc, there is also a free movement of labour and capital within the area and product standards and laws concerning free movement are common between countries
39
common external tariff
A common external tariff is set by a group of countries imposed on imported goods from non-member countries
40
economic union
A group of countries where the economies of member countries are as fully integrated economically as different regions within a single country
41
fiscal union
A group of countries where are central body has some powers over govt borrowing and spending and setting uniform rates of taxation
42
Monetary union or currency union
A group of countries which share a common currency such as the euro
43
Harmonisation
refers to the establishing of common standards, rules, and levels on everything from safety standards to tariff, taxes, and currencies
44
Trade creation
The Switch from purchasing products from a high cost producer to a low-cost producer
45
Creative destruction
A theory by Joseph Schumpeter where farms produce or create innovative new products that replace or destroy existing products in the market, large companies complete not strictly in price but in achieving successful innovations
46
branch economy
regions or countries whose economies are heavily dominated by branches or subsidiaries of foreign or external firms, rather than headquarters or independent domestic companies.
47
quota
A physical limit on the quantity of an import
48
Tariff
tax on imported goods which has the effect of rising domestic price of imports
49
50
regional trade agreement/trading bloc
An agreement between at least two countries to reduce or eliminate tariffs and other protection is barriers
51
multilateral or plural lateral trade agreement
A regional trade agreement between three or more countries
52
supply side policies
Supply side policies are government policies which seek to increase the productivity and efficiency of the economy
53
Exchange rate
It is the price of one currency in terms of another
54
dumping
The sale of goods at less than cost price by foreign producers in the domestic market
55
geriatric industry
An industry which is in decline
56
infant industry
An industry which is just starting up in its early stages of development
57
balance of payment
A record of all financial transactions made between residence of one country and the rest of the world
58
Capital account
Shows the credit (money inflows) and debit items for non-produced, non-financial assets and capital transfers between residence and non-residence
59
current account
Whether the payment for the purchase and sale of goods and services are recorded, along with primary and secondary income flow
60
Evaluation of a currency
When a government or central bank officially fixes a new lower exchange rate for the currency in a fixed or peg system of exchange rate
61
expenditure reducing method
In a balance of payment context, government policies to reduce the level of demand in order to reduce import and boost exports
62
expenditure switching
In a balance of payment context, government policies such as evaluation or protectionism designed to switch product production currently being sold dome Cicalee to export
63
Financial account
A record of almost all the flows of financial capital into an out of a country which is split into three main parts
64
Capital government expenditure
spending by the government on investment codes such as roads and hospitals, it is an improvement of infrastructure
65
current government expenditure
Spending by government on goods and services which will be consumed in the short term, day-to-day expenses
66
Transfer payment
spending for which there is no corresponding real output, transfer payments are welfare payments such as the state pension
67
Expansionary fiscal policy
Government effort to increase aggregate demand by increasing government spending and reducing taxes
68
austerity policies
Govt measures taken to reduce a budget deficit by cutting spending and or raising taxes
69
human development index
A summary measure of average achievement in key dimensions of human development? Like statistical composite index of life expectancy, education and per capita income indicators
70
prebisch singer hypothesis
suggest that overtime due to following commodity prices in relation to manufactured goods, the terms of trade for developing countries has fallen
71
Lewis Dual Sector Model
Economic development happens by transferring surplus labour from the traditional agricultural sector to the modern industrial sector.
72
Harrod-Domar Growth Model
Economic growth depends on the level of savings and the productivity of investment (capital-output ratio).
73
Interest rate
It is the cost of borrowing and the reward for saving
74
Ricardo's labour theory of value
the value of a commodity is determined by the amount of labor necessary to produce it
75
heckscher ohlin model
competitive advantage come from differences in factor endowments, not just labour.
76
lorenz curve
graphical representation that depicts the distribution of income or wealth within a population 
77
gini coefficient
measures the degree of income and inequality 
78
laffer curve
A car which shows that at low levels of taxation, tax revenues will increase if tax rates are increased. However if tax rates are high then a further rise in rate will reduce total tax revenues because of the decencetive effects of increasing tax
79
National debt
Total borrowing of the government which remains to be paid to lenders
80
Fiscal deficit and fiscal surplus
fiscal deficit is when government spending is more than revenue and vice versa
81
substitution effect
higher taxes → work becomes less attractive → labour supply may fall.
82
income effect
higher taxes → feel poorer → might work more to compensate.
83
dutch disease
economic concept that explains how a large inflow of foreign currency (usually from natural resource exports, like oil or gas) can harm a country’s broader economy, particularly the manufacturing and export sectors.
84
fiscal austerity
God spending of government or rises taxes which reduces consumption to reduce AD and then to reduce fiscal deficit
85
trade restriction
Trade barriers or protection is policies that are designed to reduce free trade
86
Quantitative easing
Asset or bonds purchased by the central bank which increases money supply

economics ial u4 (2 decks)

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