4.1 KEY TERMS

Question 1

Economy

Answer 1

state of a country in terms of production/consumption of goods

Question 2

GDP

Answer 2

valur of all goods and services produced in a country in a year

(Growth rate of country)

Question 3

Emerging econcomies

Answer 3

econcomies that have increasing growth rate but low income per head

Question 4

Examples of emerging ecocnomies

Answer 4

brazil
Russia
India
China
South Africa
Mexico

Question 5

Economic growth

Answer 5

inc in production of goods and services in country

-helps generate income

Question 6

S of econcomic growth

Answer 6

bus- inc profit, reduced cost as benefit from low labour cost in emerging country

Indiv- inc employement and inc income

Question 7

Indicators of econcomic growth

Answer 7

GDP per capita (high gdp high living standard)

Health

Literacy (% who read/write)

Human development (life expectancy, education, income)

Question 8

Imports

Answer 8

goods made in another country brought to UK

Question 9

Exports

Answer 9

goods manufactured in UK sold abroad

Question 10

Specialiusation

Answer 10

bus/country focus on producing particular good/service

Question 11

S and L of specialisation

Answer 11

S- inc production ands output (eos reduces cost)

L-country/bus can bcome reliant on 1 industry so risk not spread

Question 12

Foreign direct investment

Answer 12

Bus with head officer in one country but set up factory/office in another

Question 13

S and L of fdi

Answer 13

S- inc econcomic growth bc inflow of money in country

-inc job opps

L- genetic bus struggle to compete bc limited resources

Question 14

Horizontal FDI

Answer 14

bus produces same prod at home and in foreign country

(Zara sell cloth in England and Spain)

Question 15

Vertical FDI

Answer 15

bus invest in foreign country to care out stages of production to dec cost

(Zara bought from manuf, but now owns manuf so dec cost as no middle man)

Question 16

Globalisation

Answer 16

business operates on an international scale

Question 17

Trade liberalisation

Answer 17

removal/reduction of barriers to trade between different countries to make international trade easier

Question 18

S and L of trade liberalisation

Answer 18

S- inc international trade allowing businesses to inc market size

-business risk is spread accross multiple country

L- domestic bus may not be able to compete against international firms

Question 19

7 influences on globalisation

Answer 19

• political change (change in gov)

-reduce cost of transport inc glob

-reduced cost of communication inc glob

-inc in global companies

-transnationals (head 1/4 in multiple country L)

-multinationals (head 1/4 in one count)

-migration as ppl bring skill

Question 20

Protectionism

Answer 20

gov protects industry from foreign comp by tariff/quota

-makes imports expensive

Question 21

S and L of protectionism

Answer 21

S-helps industries grow as theres less comp

-dec reliance on foreign supplier

L- domestic bus face less comp so inc price for cons

-may bcome less efficient if less comp and dec qual

Question 22

Tariff

Answer 22

tax placed on imported goods to inc price and dec demand

Question 23

S and L of tariffs

Answer 23

S- protects businesses from advanced foreign comp

L-high import each time put off large businesses

Question 24

Import quota

Answer 24

gov put physical limitation on amount of products allowed in country

Question 25

S and L of import quota

Answer 25

S- domestic bus employ people to meet extra demand inc unemployment -domestic goods bcome less spenny so inc profit L- dec consumer choice as restriction on forgein goods -domestic bus become inefficient bc reduced comp

Question 26

Legislation

Answer 26

gov imposes laws to restrict imports to protect businesses and customers (Eg import may need to meet strict regulations to be allowed in country)

Question 27

S and L of legislation

Answer 27

S- allow domestic buisness of to grow as less comp L- inc production costs so increases cost for customer and businesses

Question 28

Domestic subsidies

Answer 28

payments given to domestic bus to lower production costs

Question 29

S and L of domestic subsidies

Answer 29

S_ bus remains competitive and protects its job in industry L- bus may become inefficient as theyre aware their costs bring subsidised

Question 30

Trade blocs

Answer 30

groups of countries that join together and form an agreement to reduce/eliminate protectionist measures between eachorther (Decreases barrier to trade)

Question 31

European Union (trade bloc)

Answer 31

27 country in union Market of 448 million cust -free movement of goods and people between countries -external barrier to countries outside bloc

Question 32

ASEAN (trade bloc)

Answer 32

10 members part of tree trade area Doesn’t allow for free movement of pupil between country

Question 33

NAFTA (trade bloc)

Answer 33

banana, Mexico, USA -free trade zone -USA bus relocate manufacturing to Mexico as low labour cost than can transport back to USA with no tariffn

Question 34

Organisation of petroleum exporting countries (trade bloc)

Answer 34

Coordinate and unify petroleum polocies of its member countries and ensure stabliation of oil markets

Question 35

S of freee trade areas

Answer 35

Lower bus cost -inc market size

Question 36

What do businesses outside the trade bloc face (L)

Answer 36

-high costs from protectionist measures -this makes them less competitive when trying to sell good to country in bloc

Question 37

S and L of buisness inside a trade bloc

Answer 37

S- access’s to more markets so inc profit -wider pool of workers L- inc comp within the bloc (smaller businesses have fewer resources to compete)