Flashcards in Globalisation Deck (15)
What is the growth rate in the UK?
0.2% (December 2018)
What is the growth rate in the MINT economies?
Why do MINT economies generally have higher rates of growth?
Since they are producing most of the manufactured foods that are globally consumed, hence emerging markets have rapid growth but high risks
What is the implication of economic growth for individuals and businesses?
What are the indicators of growth?
- GDP per capita (how much production of goods divided by population)
- HDI (GNI + life expectancy + schooling)
What is business specialisation?
Increase speed, efficiency and skill along with decreasing the time
What is comparative advantage?
To specialise and engage in trade
What is competitive advantage?
A business should specialise in any area where it can perform better
What is FDI and how does it help businesses grow?
FDI is when a firm takes more than 10% equity stake in a foreign enterprise.
What factors contribute to increased globalisation?
- reduction of trade barriers (WTO)
- political changes
- reduced cost of transport and communication
- more transnationals (MNCs)
- increased FDI
- structural changes (tertiary sector growth)
Why would a country use protectionist measures?
- to protect jobs
- to protect infant industries
- to prevent dumping (foreign producers selling goods below cost in domestic market)
- raise revenue
- improve balance of payment
- prevent entry of harmful goods
What are forms of trade barriers?
- Government legislation
What are problems with imposing trade barriers?
- Inelastic demand for imports
What are the types of trading blocs ?
- Regional trade agreements (allows certain types of products from countries) ASEAN
- Free Trade Area (NAFTA)
- Customs Union (members have a common set of barriers against non members, but free trade between them) CARICOM
- Common market (goods, labour and capital move freely) ASEAN
- Single Market (common laws and free movement) EU
- Economic Union (common currency) EU