IA1 Flashcards
(35 cards)
Absolute Advantage: Adam Smith
The ability of a country to produce a specific good or service more efficiently than another country.
Comparative Advantage: David Riccardo
The ability of a country to produce a good or service at a lower opportunity cost compared to other countries.
Competitive Advantage: Michael Porter
An advantage that allows a country or firm to outperform its competitors in terms of profitability, market share, or efficiency.
Currency Devaluation:
A deliberate reduction in the value of a country’s currency relative to other currencies.
Currency Revaluation:
A deliberate increase in the value of a country’s currency relative to other currencies.
Economic Integration:
The process of harmonizing economic policies and regulations among multiple countries, often leading to a shared market.
Economic Union:
A higher level of economic integration where member states share a common currency, economic policies, and institutions.
Exchange Rate Appreciation and Depreciation:
Appreciation is an increase in the value of a country’s currency, while depreciation is a decrease.
External Stability:
The ability of a country’s economy to withstand external shocks or disturbances.
Internal Stability:
The maintenance of stable prices and full employment within a country’s economy.
Factor Endowment:
The quantity and quality of a country’s resources, including labor, land, and capital.
Free Trade:
The unrestricted exchange of goods and services between countries without tariffs or other trade barriers.
Globalisation:
The process of increased interconnectedness and interdependence among countries in terms of economics, culture, and politics.
Sustainable Economic Growth:
Economic growth that is environmentally sustainable and inclusive of all segments of society.
Trade Liberalisation:
The reduction or elimination of trade barriers to promote free trade.
Open Economy:
An economy that engages in international trade and allows the exchange of goods, services, and capital with other countries.
Advantages of International trade:
Increased market size, specialization, higher efficiency, access to resources, and potential for economic growth.
Circular Flow Model:
A representation of the flow of goods, services, and money between households, firms, and the government in an economy.
Disadvantages of international trade:
Vulnerability to global economic conditions, potential job displacement, and trade imbalances.
Composition and Direction of Australia’s Trade Patterns:
Australia’s trade patterns primarily involve the export of natural resources such as coal, iron ore, and agricultural products. Additionally, services like education and tourism play a significant role.
Major trading partners include China, Japan, South Korea, and the United States. China, in particular, is a key destination for Australian exports.
Comparison with Emerging Patterns in International Trade:
Emerging trends in international trade include a shift towards digital goods and services, increased emphasis on sustainable and ethical production, and the growth of e-commerce.
Australia is also seeing a rise in exports of high-tech goods and services, reflecting a move towards more diverse trading opportunities.
Multinational Corporations:
These companies operate in multiple countries, driving cross-border trade and investment.
Regional Trading Blocs:
Agreements like the EU, ASEAN, and NAFTA promote regional economic integration.
Deregulation of Financial Markets:
Easier movement of capital across borders has facilitated international trade and investment.
