Topic 4 Flashcards
(30 cards)
Reasons for international trade
Improve political relationships
Increase output
To obtain goods other countries specialise in
Fewer scarce resources are used globally
The EU
An economic and political group of countries in Europe that trades freely with one another
Features of EU membership
Free trade
Common laws
Common tariffs with non EU members
Free movement of people
Current account
The record of trade in goods and services, income flows (earnings on investments) and transfers (Of payments not trade) between one country and the rest of the world.
Balance of payments on current account
The total of net trade in goods and services, income flows and transfers between one country and the rest of the world
Reasons for widening UK BOP net amount
Product deficit increasing
More imports of products such oil and gas
Falling exports to the EU as some economies slowdown
Costs of a deficit
May reflect falling demand for domestic goods
Increases the debt of a country
Positives of a deficit
May reduce inflation
Overtime may lead to depreciation of the £
May only be a small % of GDP
Positives of a surplus
May reflect rising demand for domestic goods
May decrease the country’s debt
Costs of a surplus
May lead to rising inflation
May lead to appreciation of the £
Could be a result of protectionist policies e.g tariffs
Causes of a surplus
High quality/low price goods
Weak £
Lack of domestic growth (businesses therefore focus internationally)
A net inflow of investment
Causes of a deficit
Poor quality/expensive goods
Strong £
A net outflow of investment
Falling incomes overseas
Factors affecting demand for £
UK goods become more desirable
Incomes rise in other economies
UK becomes more desirable for foreign investment - speculation the pound may get stronger
Higher UK interest rates
Factors affecting supply of the £
Higher overseas interest rates
Products in overseas markets become more attractive
Higher UK incomes
Overseas market s become more attractive for British investors
IIAA
Impacts of weakening/strengthening £
Inflation effects
Deficit/surplus effects
More/less holidays
More/less demand of goods (PED dependant)
Employment/unemployment
Development
The process of increasing people’s standard of living and wellbeing over time
Development measures
GDP per capita
Access to education
Access to healthcare
Access to technology
Life expectancy
Developed country
A country with high GDP per capita and developed industries and service sectors.
Developing country
A country with lower GDP per capita, weaker indicators of wellbeing and lower levels of industrialisation.
Costs of globalisation for producers in developed countries
- Vulnerability to worldwide changes (dependent on global income)
- A possible decline in industry (from more competition in less developed countries)
Benefits of globalisation for producers in developed countries
- Wider market to sell to (more revenue)
- Cheaper and wider supply of resources
- Advances in technology (sharing scientific research)
- A cheaper and more skilled workforce
Costs of globalisation for workers in developed countries
● Decline of industry and unemployment
● An increase in the use of machinery and unemployment
● An increase in dependence on world markets and
unemployment
● An increase in immigration and unemployment from increased skill and price competition from migrants
Benefits of globalisation for workers in developed/developing countries
● Increased employment due to increased output
● Increased employment due to increased investment
● Increased geographical mobility (workers can live and work abroad)
Costs of globalisation for consumers in developed countries
● Less choice due to global brands - loss of smaller brands
● Volatility and rising prices - from fluctuating prices and more competition from consumers
