Economics unit 4 definitions

?
  • Created by: Martha
  • Created on: 03-06-14 17:42
Globalisation
Refers to the growing integration of national economies in terms of trade, financial flows, ideas, information and technology, and the movement of people
1 of 45
The Theory of Comparative Advantage
explains how world output can be increased if countries specialise in the goods and services in which they have a comparative advantage
2 of 45
Global Imbalances
Some parts of the world are running huge current account surpluses and have a glut of savings, whilst other parts of the world have huge current account deficits and excess debt
3 of 45
Tariffs
A tax on imports - they can be specific or ad valorem
4 of 45
Quotas
a physical limit on to the amount of an imported good that may be sold in a country in a given period
5 of 45
Dumping
occurs when a good is sold abroad at a price below the price in the domestic market
6 of 45
The WTO
a multi-lateral organisation with156 countries. It helps to promote free trade by persuading countries to lower their import tariffs and other barriers to open markets
7 of 45
Trading Block
A group of countries that agree to reduce or eliminate trade barriers between themselves. The number of trading blocks has increased significantly over the last 50yrs
8 of 45
Trade creation
involves a shift in domestic consumer spending from a higher cost domestic source to a lower cost partner source
9 of 45
Trade diversion
involves a shift in domestic consumer spending from a lower cost world source to a higher cost partner source
10 of 45
balance of payments
a record of all the financial transactions between the UK and the rest of the world
11 of 45
The Marshall Learner Condition
a devaluation will improve the current account position only if the combined elasticities of demand for exports and imports are greater than 1
12 of 45
Monetary Union
occurs when at least 2 countries share the same currency. The most important monetary union is the EMU
13 of 45
Competitiveness
the measure of your ability to sell your goods and services to the rest of the world
14 of 45
Income
a flow of money
15 of 45
wealth
a stock concept
16 of 45
absolute poverty
measures the number of people living below a certain income threshold, or the number of households unable to afford certain basic goods and services. living on less then $1.25 per day
17 of 45
relative poverty
measures the extent to which a household's financial resources fall below an average level of income. The most commonly used threshold of low income in the EU is 60% of median household income after deducting housing costs.
18 of 45
the Gini Coefficient
a commonly used measure of income inequality that condenses the entire income distribution for a country into a single number between 0 and 1. the higher the number the greater the inequality
19 of 45
Economic growth
an increase in real GDP
20 of 45
Economic development
an increase in living standards
21 of 45
HDI
a composite measure consisting of GNI per capita, life expectancy and literacy rates
22 of 45
the multiplier effect
any increase in autonomous expenditure (GIX) will lead to a greater increase in income as the money is passed around the circular flow many times, each time decreasing slightly due to leakages
23 of 45
sharecropping
a system in which the landlord and tenant share the rewards of the crop
24 of 45
terms of trade
the ratio of export prices to import prices
25 of 45
primary product dependency
when a country is reliant on one product for more then a third of its GDP
26 of 45
millennium development goals
goals set for each LDC reflecting a range of development objectives to be monitored each year to evaluate progress.
27 of 45
Harrod-Domar Model
a model of economic growth that emphasises the importance of savings and investment
28 of 45
Foreign Exchange Gap
a situation in which an LDC is unable to import the goods that it needs for development because of a shortage of foreign exchange
29 of 45
Rostow model of economic growth
a process described by Rostow, which set out 5 stages through which he claimed that all developing countries would pass
30 of 45
Industrialisation
a process of transforming an economy by expanding manufacturing and other industrial activity
31 of 45
Lewis model
LDC's have 2 sectors; Traditional and Modern. Labour can be transferred from the traditional to the modern sector in order to bring about growth and development
32 of 45
Dependency theory
the countries of the world can be divided into CORE and PERIPHERY, and that countries in the core developed by exploiting those in the periphery
33 of 45
FDI
investment undertaken in oner country by firms based in other countries
34 of 45
Aid
the voluntary transfer of resources from one country to another, or to give loans on concessionary terms. Aid may also be given for emergency relief
35 of 45
Micro finance
schemes that provide finance for small - scale projects
36 of 45
Fair Trade Schemes
schemes that set out to ensure that small producers in LDC"s receive a fair price for their products
37 of 45
Cyclical/demand deficient unemployment
when an economy goes into a recession unemployment rises because there is an insufficient demand within the economy
38 of 45
classical unemplyment
exists when the real wage rate is above that need to clear the labour market even when the economy is doing well
39 of 45
the phillips curve
shows the relationship between the rate of change of money wages and employment
40 of 45
Fiscal policy
involves the use of government spending, taxation and borrowing to affect the level and growth of AD, output and jobs
41 of 45
discretionary fiscal changes
deliberate changes in direct and indirect taxation and gov spending
42 of 45
automatic stabilisers
changes in tax revenues and government spending that come about automatically as an economy moves through the business cycle
43 of 45
budget deficit
in a given year, total government spending exceeds total tax revenue
44 of 45
monetary policy
influences the level of activity in the economy and hence inflation by manipulating the price and quantity of money available in the economy
45 of 45

Other cards in this set

Card 2

Front

explains how world output can be increased if countries specialise in the goods and services in which they have a comparative advantage

Back

The Theory of Comparative Advantage

Card 3

Front

Some parts of the world are running huge current account surpluses and have a glut of savings, whilst other parts of the world have huge current account deficits and excess debt

Back

Preview of the back of card 3

Card 4

Front

A tax on imports - they can be specific or ad valorem

Back

Preview of the back of card 4

Card 5

Front

a physical limit on to the amount of an imported good that may be sold in a country in a given period

Back

Preview of the back of card 5
View more cards

Comments

No comments have yet been made

Similar Economics resources:

See all Economics resources »See all unit 4: the global economy resources »