Definitions 4.1 Flashcards
Globalisation
the growth of international trade that has made an increasing number of markets global rather than national
GDP
the value of all the goods and services produced within a specified time period such as a year
Per Capita
this means looking at data per head of the population, to make it easier to make statistics from countries of different size
Balance of payments deficit
imports outweigh exports; if it continues indefinitely, it means ever greater build-up of foreign currency debt
Fixed Capital formation
an economist’s way of saying investment in long-term assets, such as roads or buildings
Invisible export
the sale of a service to an overseas consumer
Free trade
no tariffs or quotas
Purchasing power parity
adjusting income levels to allow for differences in the cost of living, e.g. a dollar might but three times more groceries in India rather than in America
Trading bloc
A regional grouping of countries agreeing to free trade and - sometimes - free movement of labour; the EU is a trading bloc
Inward foreign direct investment
investment into a country such as the UK from companies abroad, perhaps in the form of buying up one of our businesses, or buying up property assets
Outward foreign direct investment
investment from a country such as the Uk, perhaps building a factory in Brazil (e.g. JCB) or buying property in Nairobi
Saturated market
one where (nearly) everyone who wants an item already has it, so sales can stables or slip back e.g. fridges in the UK
Scientific management
F.W. Taylor suggested that managers should maximise worker productivity by calculating how best to divide up tasks into smaller fragments, then incentivise workers to produce exactly as set out by managers (often includes a piece-rate pay)
Liberalisation
minimising the rules and regulations faced by businesses; or, on a global scale, reducing the barriers to freely moving international trade
Regulations
rules created as a result of laws passed by parliament
Counter-cyclical
expansionary government policies to counter a downturn in the economic cycle
Keynesian
an economic policy based on the views of British economist John Maynard Keynes, who urged governments to take action to boost economies when hit by recession (so-called ‘counter-cyclical policies’)
Structural unemployment
potentially long-term unemployment as a fundamental economic shift makes an industry and therefore the skills of its workers obsolete e.g. the widespread closures of coal mines and clothing factories in 1980s Britain
Trade War
an economic battle between two countries based entirely on protectionist measures such as import quotas; one starts, so the other retaliates and this can spiral out of control
Home market
the number of customers that can be reached without needing to jump administrative hurdles; the Empire once provided Britain with the world’s biggest home market; today the EU provides a smaller equivalent
Single Market
dismantling trade barriers within Europe so that all 28 countries can treat the whole region as their home market
Pull factors
positive factors overseas that entice a UK business to look outside the UK
Push factors
negative factors within the UK that push a UK business to look overseas
Outsourcing
contracting another business to perform a business function on your behalf. This could be anything from outsourcing catering at your school to Apple outsourcing iPhone assembly to Foxconn
