The global economy definitions Flashcards
(23 cards)
Globalisation
Growing interconnection of the world’s economies
Interdependence
Where the actions of one country or large firm will have a direct effect on others
MULTINATIONAL CORPORATION (MNCs)
Companies that operate in many different countries
FOREIGN DIRECT INVESTMENT (FDI)
When a company makes an investment in a foreign country
OFFSHORING
Practice of getting work done in another country in order to save money
RESERVES
Amount of something valuable, such as oil, gas, or metal ore
TAX AVOIDANCE
Practice of trying to pay less tax in legal ways
REPATRIATION
Where a multinational returns the profits form an overseas venture to the country where it is based, typically from a developing country to a developed country
FREE TRADE
Situation in which the goods coming into or going out of a country are not controlled of taxed
PROTECTIONISM
Approach used by governments to protect domestic producers
TRADE BARRIERS
Measures designed to restrict imports
DUMPING
Where an overseas firm sells large quantities of a product below cost in the domestic market
INFANT INDUSTRIES
New industries yet to establish themselves
TARIFFS
Tax on imports to make them more expensive
QUOTA
Physical limit on the quantity of imports allowed into a country
TRADING BLOCS
Groups of countries situated in the same region that join together and enjoy trade free of tariffs, quotas and other forms of trade barriers
TRADE LIBERALISATION
Move towards greater free trade through the removal of trade barriers
COMMODITIES
Product in its raw form which can be sold to make profit
EXCHANGE RATE
Price of one currency in terms of another
FOREIGN EXCHANGE MARKET
Market where foreign currencies can be bought and sold
APPRECIATE
Where the value of a currency rises due to market forces, increases exchange rate
REVALUATION
When a government fixes a new higher exchange rate
DEPRECIATE
Where the value of a currency falls due to market forces, decreases exchange rate
