The International Economy Flashcards
Absolute advantage
When an economy is able to produce greater quantity of output with the same quantity of input
Aid
Transfer of resources between economies
Bilateral aid
Aid given from one country to another
Comparative advantage
When an economy is able to produce greater quantity of output at a lower opportunity cost
Debt relief
Partial or total forgiveness of debt slowing of debt growth
Developed countries
Countries with high GDP per capita; tend to export manufactured goods
Developing countries
Countries with low GDP per capita; tend to export agriculture
Economic development
Assessing the standards of living and economic welfare of those in a country
Economic integration
The process by which economies become more closely linked
Emerging countries
Countries that aren’t fully developed, yet are more developed than LEDCs
Foreign direct investment (FDI)
When firms in one country make investments into another country
Free trade
Trade with no barriers or restrictions
Human Development Index (HDI)
Measures an economy’s development based on 3 main criteria; life expectancy, educational achievement, and living standards Measures an economy’s development based on 3 main criteria; life expectancy, educational achievement, and living standards
Globalisation
The process in which economies become increasingly interconnected and markets become worldwide in scope
Multi-national corporation (MNC)
Firms who operate in multiple countries
