Economic power
ability of countries, individuals, or businesses to improve their standard of living and decreases ability of outside forces to limit their freedom
factors influencing economic power
- ability to get other countries to behave in a way they otherwise wouldn’t
- widely used currency
- abundance of natural resources
- clear governance/stable government
- harmonious relations with other countries
- large and diverse population
economic growth
increase in the value of goods and services produced in an economy over a period of time
implications of economic growth for individuals
Shifting employment patterns:
- increased job opportunities
- structural change can cause lack of employment in certain industries
implications of economic growth for firms
trade and rationalisation opportunities:
- rationalisation via savings, streamlining and cutting down on unneccesary costs can allow increased efficiency to counter increased competition
nominal value
figure that hasn’t been adjusted for inflation
real value
figure that has been adjusted for inflation
trade
exchange of goods and services
trade liberalisation
The removing of obstacles that prevent businesses from trading either other nations
methods of trade liberalisation
- specialisation
- removal of trade barriers
- trade blocs
- WTO
- political change
Quota
physical limit on the amount of goods that can be imported into a country
Tarrif
tax on imports, applied by the government of the country into which goods are being imported
Non tariff barriers
rules and regulations that make another country consider not trading with that country
specialisation
when a person, business, or a country concentrates on a specific product or task
comparative advantage
if a country is able to provide a good or service at a lower opportunity cost than another country
absolute advantage
when a country is able to produce a good or service at a lower cost than another country
FDI
Investment made by a firm or individual in one country into business interests located in another country
World Bank FDI definition
net inflows of investment to acquire a lasting management interest (10% or more of voting stock) in an enterprise operating in an economy other than that of the investor
Trade blocs
Group of countries within a geographical region that aim to increase trade by reducing protectionism within bloc
Types of trade bloc
- free trade arena (FTA)
- customs union
- common market
- single market
(Degree of integration increases with each one)
FTA
- agree to reduce or eliminate tariffs
Customs union
- removal of tariffs and quotas
- acceptance of a common external tarriff
Common market
- close to full economic integration
- all barriers to trade in goods, services, capital and labour removed
- non tariff barriers reduced/eliminated
Single market
- full economic integration
- some degree of political integration
- shared aims and values between nations
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1.1 scarcity choice and potential conflicts11
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1.2 enterprise business + the economy7
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1.3 introducing market39
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1.4 role of credit in economy10
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1.5 market failure & government intervention16
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1.6 revenue, costs, profit, and cash21
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2.1 business growth and competitive advantage26
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2.2 firms consumers and elasticities of demand21
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2.3 productive efficiency18
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2.4 globalisation24
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2.5 the economic cycle28
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2.6 intro to macroeconomic objectives17
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4.1 spectrum of competition25
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4.2 market power and failure11
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3.2 economic factors in business expansion2
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4.3 market failure across the economy13
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4.5 risk and the financial sector21
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4.4 macroeconomic policies and impact on firms and individuals23
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3.1 globalisation38
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3.2 conditions that prompt trade12
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3.3 impact of globalisation on global companies16
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3.4 impact of globalisation on local and national economies9
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3.5 global labour markets12
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3.6 inequality and redistribution32
