The Global Economy (Mod 1) Flashcards
(23 cards)
What is meant by the term “The Global Economy”?
Refers to individual economies that linked with each other.
What impact can a change in an individual economy have on neighbouring economies?
The individual economy may have a ripple effect on neighbouring countries, the intensity relates on the strength of their connection.
What is the Gross World Product (GWP)?
The Gross World Product refers to the total value of all goods and services produced worldwide in a year.
It is a combination of all the GDPs in the world.
What was the GWP in 2020?
$100 Trillion USD
What is the forecasted GWP in 2034?
$150 Trillion USD
What is Globalisation?
Globalisation refers to the economic integration of two or more nations and emergence of a global market.
How is globalisation achieved?
Globalisation is achieved through government policies of trade liberalisation and financial deregulation resulting in movement of labour, investment, finance, trade, and technology.
What are the resultants of financial deregulation?
Labour, investments, finance, trade and technology.
By what acronym can you remember the resultants of financial deregulation?
L.I.F.T.T
What is trade in goods and services
Refers to the sales of goods and services across national borders.
What are imports?
Goods and services that are bought/brought from a different country.
What are exports?
Goods and services that are sold to a different country.
Why is trade an indicator of globalisation?
It is an measure of how many goods and services produced in an economy are consumed in other economies.
What was the Global Financial Crisis caused by?
The GFC was caused by the downturn US sub-prime mortgage housing market, which was a catalyst for the extremely volatile financial crisis.
Did the GFC have any impact on countries other than the US?
Yes, it had a ripple effect on almost all economies in the world.
What is the composition of trade?
The mix of goods and services traded.
Does economic growth fluctuate in cycles?
Yes, more specifically the pattern can be defined by the business cycle.
What is the international business cycle?
Refers to the ebb and flow of world economic growth
What is the regional business cycle?
Refers to the changes in economic activity in a particular region.
What is free trade?
It is a situation where governments impose no artificial barriers to trade that restrict the free exchange of goods and services between countries with the aim of shielding domestic producers from foreign competitors.
What is comparative advantage?
Comparative advantage is when a country can produce a good at a lower opportunity cost than other countries can.
What is absolute advantage?
Absolute advantage is an attribute of a nation that can produce a greater quantity of a product with a fixed amount of resources, than another country.
