4 1 globalisation

GDP is gross domestic product, the total value of goods and services produced in a country over a specific period.

An emerging economy is one that has increasing growth rates but relatively low income per capita.

False. The UK's growth rate tends to be lower than emerging economies.

False. The UK economy has seen a decline in the manufacturing sector. Businesses often choose to manufacture in emerging economies due to their lower labour costs and access to raw materials.

Competitive advantage is when a business or country can produce a good or service more efficiently than its competitors.

FDI stands for foreign direct investment.

True. Economic growth leads to increased average incomes for individuals as their incomes rise due to employment, which increases the standard of living.

GDP per capita is calculated by taking the total output (GDP) of a country and dividing it by the number of people in that country.

The Human Development Index (HDI) combines the factors of life expectancy, education and income to determine the quality of development of citizens within a country.

The BRICS economies are:

True. More-developed economies tend to have higher rates of literacy.

The four key indicators of growth are:

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

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

Specialisation occurs when a country or business decides to focus on producing particular goods or services.

Benefit of specialisations include:

Foreign direct investment (FDI) is investment by foreign firms which results in more than 10% share of ownership of domestic firms.

Inward FDI occurs when a foreign business invests in the local economy.

Outward FDI occurs when a domestic business expands its operations to a foreign country.

True. Exports generate extra revenue for businesses selling their goods abroad.

A benefit of FDI for a country's economy is increased economic growth as there is an inflow of money into the country.

A joint venture is a partnership between two or more businesses to pursue a particular business activity together.

Trade liberalisation is the removal or reduction of barriers to trade between different countries.

Dumping is when foreign firms sell products at unfairly low prices in foreign markets, usually at a price below their normal cost of production.

A transnational company is a business that operates in more than one country.

Migration is the movement of people from one location to another.

The global labour force is the total number of people employed or actively seeking employment worldwide.

True. Reduced costs of transport and communication has contributed to increased globalisation.

Structural change is when a country, industry or market changes which sector of industry they primarily operate in.

False. The UK has shifted from the manufacturing sector to the tertiary sector over the last 50 years.

Globalisation is the economic integration of different countries through increasing freedoms in the cross-border movement of people, products, technology and finance.

Containerisation is a global shipping method that allows large volumes of goods to be transported quickly and easily in standardised containers on very large vessels.

Protectionism is when a government seeks to protect domestic industries from foreign competition.

A tariff is a tax placed on imported goods from other countries.

True. A tariff increases the price of imported goods, which helps shift demand for that product or service from foreign businesses to domestic businesses.

True. Tariffs reduce dumping by foreign businesses as they cannot sell below the market price.

An import quota is a government-imposed limit on the amount of a particular product allowed into the country.

True. Import quotas limit the supply of a product and whenever supply is limited, the price of the product rises.

False. Restricting the physical amount of imports means that domestic businesses face less competition and benefit from higher market share.

A subsidy is a payment given to domestic businesses to help lower production costs and improve their competitiveness against foreign competition.

True. A drawback of domestic subsidies is that businesses may become inefficient as they know their costs are being subsidised.

True. Government subsidies, which are payments given to domestic businesses to help lower production costs, can protect domestic industries.

A trading bloc is a group of countries that form an agreement to reduce or eliminate protectionist measures between each other.

The world's largest trading blocs include:

False. The UK voted to leave the EU in 2016, and officially left in 2020.

True. Countries within the union have no trade restrictions between themselves. It is a free trade area.

A free trade area is a collection of countries that have agreed to have no trade restrictions, such as tariffs, between them.

USMCA stands for the United States, Mexico, and Canada free trade agreement.

An external tariff wall is a tax applied to imported goods by a group of countries that have formed a trade agreement. This protects businesses within the trading bloc from competition from those outside of the trading bloc.

Free movement of labour is the right of individuals from member countries to work and travel without restriction within a trade bloc.

Trade diversion is where trade is taken away from efficient producers who operate outside of a trade bloc and replaced by trade within the bloc.