4.1 globalisation

Question 1

how is growth rate measured

Answer 1

GDP

Question 2

what is GDP

Answer 2

the total value of all goods and services sold in an economy within a given time period

Question 3

what is an emerging economy

Answer 3

an economy that has high rates of growth - normally LEDC’s meaning there is low GDP per capitas

Question 4

2 examples of emerging economies

Answer 4

BRICS
MINT

Question 5

what is a developed economy

Answer 5

an economy that has lower rates of growth but has high GDP per capita figures

Question 6

why is UK growth lower than emerging economies

Answer 6

decine of growth in manufacturing sectors - due to high costs of labour - products are not competitive with those of other nations with low costs and lack of raw materials

Question 7

what is globalisation

Answer 7

economic integration of different countries through increasing freedoms in the cross-border movement of people, goods/services, technology and finance

Question 8

implications of economic growth on firms

Answer 8

increased profit
lower COP
more investment + FDI

Question 9

4 indicatiors of growth

Answer 9

GDP per capita
literacy
health
HDI

Question 9

implications of economic growth on individuals

Answer 9

reduced unemployment
increased incomes
better standard of life (tax rev)

Question 10

indicator of growth - GDP per capita

Answer 10

high value signifies a high standard of living
there needs to be a percentage increase to see improvements

Question 11

indicator of growth - health

Answer 11

average life expectancy, the infant mortality rate, access to healthcare and access to clean water

Question 12

indicator of growth - literacy

Answer 12

Literacy refers to the percentage of adults within an economy who can read and write - high rates lead to a more qualified and highly skilled workforce

Question 13

indicator of growth - HDI

Answer 13

combines the factors of life expectancy, education and income to determine the quality of development of citizens within a country - measured between 0-1

Question 14

problems with using HDI as an indicator of growth

Answer 14

does not account for inequality within nations
nations may lack reliable data to make the country look more attractive

Question 15

import definition

Answer 15

goods and services bought by people and businesses in one country from another country

Question 16

export definition

Answer 16

goods and services sold by domestic businesses to people or businesses in other countries

Question 17

what is specialisation

Answer 17

when a country/business decides to focus on producing a particular good/service

Question 18

why do nations specialise

Answer 18

to focus on selling a specific good or service
Specialisation can increase the quantity and quality of goods and services produced
Lower unit costs due to economies of scale, as costs are spread over a large output
Gain a competitive advantage over competitors such as a lower price

Question 19

what is FDI

Answer 19

investment by foreign firms that results in more than a 10% share of ownership in domestic firms - in order to access new markets

Question 20

inward FDI

Answer 20

when a foreign business invests in the local economy - chinese investors building railways in africa

Question 21

outward FDI

Answer 21

when a domestic business expands its operations to a foreign country - moving manufacturing abroad

Question 22

how do LEDCs benefit from FDI

Answer 22

increased economic growth
increased job opportunities
access to more knowledge and expertise
more tax revenue

Question 23

what is trade liberalisation

Answer 23

removal or reduction of barriers of trade between nations

Question 24

benefits of trade liberalisation

Answer 24

Increased international trade allows businesses to increase their market size - increased output -- EOS reduced costs as raw materials can be bought for less

Question 25

drawbacks of trade liberalisation

Answer 25

small domestic firms may not be able to compete with MNCs - reduces that nations growth and innovation - making them less competitive nations may be subject to dumping - excess products sold cheap making domestic products uncompetitive

Question 26

factors contributing to increased globalisation

Answer 26

political change reduced costs of transport and communication increased significance of global companies increased FDI migration growth of global labour force trade liberalisation

Question 27

4 types of protectionism

Answer 27

tariffs trade quotas government subsidies government legislation

Question 28

what is a tariff and what does it do

Answer 28

a tax placed on imported goods - increases price of goods - shifting demand inwards

Question 29

benefits and negatives of tariffs

Answer 29

protects domestic industries generates more government revenue reduces consumer choice increases COP (raw materials become more expensive) reduces competition for domestic firms - reduces innovation

Question 30

what is an import quota

Answer 30

a government imposed limit on the amount of a particular good that is allowed into a country

Question 31

benefits and negatives of import quotas

Answer 31

more demand for domestic goods - more jobs encourages new business creation - greater reward increase in price of good as supply is restricted cause international tension firms may be more inefficient - lower competition

Question 32

what is government legislation

Answer 32

imposing laws restricting certain imports - protecting customers and businesses

Question 33

what are domestic subsidies

Answer 33

government given grants aimed to reduce costs in domestic industries

Question 34

what is a trading bloc

Answer 34

a group of countries that form an agreement to reduce or eliminate protectionist measures between each other

Question 35

3 largest trading blocs

Answer 35

EU ASEAN (association of southeast asian nations) USMCA (NAFTA)

Question 36

characteristics of the EU

Answer 36

Countries within the union have no trade restrictions between themselves - free movement Countries within the union have common external barriers (e.g. tariffs) to countries outside of the union

Question 37

characteristics of ASEAN

Answer 37

free trade area but not free movement of people free trade area allows firms to expand market - generating more revenue

Question 38

benefits of USMCA/NAFTA

Answer 38

US and canada move manufacturing to mexico results in mexico receiving FDI

Question 39

4 benefits from firms inside a trading bloc

Answer 39

wider access to markets external tariff walls - keeping outside competition low infrastructure support free movement of labour

Question 40

4 negatives for businesses inside trading blocs

Answer 40

increased competition - harming small firms must follow common rules and regulations retaliation inefficiency due to tariff walls - leads to trade diversion