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What is meant by GDP?
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What is meant by GDP?
GDP is gross domestic product, the total value of goods and services produced in a country over a specific period.
What is an emerging economy?
An emerging economy is one that has increasing growth rates but relatively low income per capita.
True or False?
The UK's growth rate tends to be higher than that of emerging economies.
False.
The UK's growth rate tends to be lower than emerging economies.
True or False?
The UK economy has seen growth in its manufacturing sector in recent years.
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.
Define the term competitive advantage.
Competitive advantage is when a business or country can produce a good or service more efficiently than its competitors.
What does FDI stand for?
FDI stands for foreign direct investment.
True or False?
Economic growth leads to increased average incomes for individuals.
True.
Economic growth leads to increased average incomes for individuals as their incomes rise due to employment, which increases the standard of living.
How is GDP per capita calculated?
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.
What is the Human Development Index (HDI)?
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.
Name the five BRICS economies.
The BRICS economies are:
Brazil
Russia
India
China
South Africa
True or False?
More-developed economies have higher rates of literacy.
True.
More-developed economies tend to have higher rates of literacy.
What are the four key indicators of growth?
The four key indicators of growth are:
GDP per capita
Literacy rates
Health indicators
Human Development Index
What are imports?
Imports are goods and services bought by people and businesses in one country from another country.
What are exports?
Exports are goods and services sold by domestic businesses to people or businesses in other countries.
Define the term specialisation.
Specialisation occurs when a country or business decides to focus on producing particular goods or services.
State two benefits of specialisation.
Benefit of specialisations include:
Lower unit costs due to economies of scale as costs are spread over a large output
Lower costs allow for lower prices, leading to more sales
Lower costs may mean an increase profit margins
Excess output can be sold abroad as exports
Define foreign direct investment (FDI).
Foreign direct investment (FDI) is investment by foreign firms which results in more than 10% share of ownership of domestic firms.
What is inward FDI?
Inward FDI occurs when a foreign business invests in the local economy.
What is outward FDI?
Outward FDI occurs when a domestic business expands its operations to a foreign country.
True or False?
Exports generate extra revenue for businesses selling their goods abroad.
True.
Exports generate extra revenue for businesses selling their goods abroad.
What is a the main benefit of FDI for a country's economy?
A benefit of FDI for a country's economy is increased economic growth as there is an inflow of money into the country.
What is a joint venture?
A joint venture is a partnership between two or more businesses to pursue a particular business activity together.
Define the term trade liberalisation.
Trade liberalisation is the removal or reduction of barriers to trade between different countries.
What is the meaning of the term dumping?
Dumping is when foreign firms sell products at unfairly low prices in foreign markets, usually at a price below their normal cost of production.
Define the term transnational company.
A transnational company is a business that operates in more than one country.
What is migration?
Migration is the movement of people from one location to another.
What is the global labour force?
The global labour force is the total number of people employed or actively seeking employment worldwide.
True or False?
Reduced costs of transport and communication has contributed to increased globalisation.
True.
Reduced costs of transport and communication has contributed to increased globalisation.
What is structural change in an economy?
Structural change is when a country, industry or market changes which sector of industry they primarily operate in.
True or False?
The UK has shifted from the tertiary sector to the manufacturing sector over the last 50 years.
False.
The UK has shifted from the manufacturing sector to the tertiary sector over the last 50 years.
What is meant by the term globalisation?
Globalisation is the economic integration of different countries through increasing freedoms in the cross-border movement of people, products, technology and finance.
What is meant by containerisation?
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.
Define the term protectionism.
Protectionism is when a government seeks to protect domestic industries from foreign competition.
What is a tariff?
A tariff is a tax placed on imported goods from other countries.
True or False?
A tariff increases the price of imported goods.
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 or False?
Tariffs reduce dumping by foreign businesses.
True.
Tariffs reduce dumping by foreign businesses as they cannot sell below the market price.
What is meant by an import quota?
An import quota is a government-imposed limit on the amount of a particular product allowed into the country.
True or False?
Import quotas can cause product prices to rise.
True.
Import quotas limit the supply of a product and whenever supply is limited, the price of the product rises.
True or False?
Restricting the physical amount of imports means that domestic businesses face more competition.
False.
Restricting the physical amount of imports means that domestic businesses face less competition and benefit from higher market share.
What is a government subsidy?
A subsidy is a payment given to domestic businesses to help lower production costs and improve their competitiveness against foreign competition.
True or False?
A drawback of government subsidies is that businesses may become inefficient.
True.
A drawback of domestic subsidies is that businesses may become inefficient as they know their costs are being subsidised.
True or False?
Government subsidies can be used to protect domestic industries.
True.
Government subsidies, which are payments given to domestic businesses to help lower production costs, can protect domestic industries.
What is meant by the term trading bloc?
A trading bloc is a group of countries that form an agreement to reduce or eliminate protectionist measures between each other.
Name one of the world's largest trading blocs.
The world's largest trading blocs include:
The European Union (EU)
The Association of Southeast Asian Nations (ASEAN)
The United States, Mexico, and Canada bloc (USMCA)
True or False?
The UK is a member of the European Union.
False.
The UK voted to leave the EU in 2016, and officially left in 2020.
True or False?
Countries within the European Union have no trade restrictions between themselves.
True.
Countries within the union have no trade restrictions between themselves. It is a free trade area.
What is meant by the term 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.
What does USMCA stand for?
USMCA stands for the United States, Mexico, and Canada free trade agreement.
What is an external tariff wall?
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.
What is meant by the free movement of labour?
Free movement of labour is the right of individuals from member countries to work and travel without restriction within a trade bloc.
What is meant by trade diversion?
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.