ECONOMIC INTEGRATION
The increasing interconnectedness and interdependence of single economies into one global economy.
globalisation
The incomes from factors of production.
Rent, Wages/Salary, Profit, Interest
Cash payments made to local producers to increase supply in the face of import competition.
Subsidies
Refers to the process by which the economic well-being and quality of life of a nation, region, local community, or an individual are improved according to targeted goals and objectives.
Economic development
An item in the Capital and Financial Account. Referred to as investment into equity securities (such as shares, options and rights) and debt securities (other than direct investment and includes bonds and notes).
Portfolio investment
Two examples of emerging economies
Brazil, Russia, India and China (BRIC)
Low income countries with around half the population in absolute poverty
Developing economies
Government policies and industry regulation, where a certain percentage of inputs or outputs must be manufactured within Australia.
Local Content Rules
Includes the following:
1. Life expectancy at birth
2. Adult literacy and educational attainment
3. Real GNI per capita income
Human Development Index
When businesses and consumers fail to consider the social costs or benefits of production.
Market failure
THREE advantages of free trade
Increased specialisation of production, a greater range of output, increased competition between firms and increased productivity of resources, economic growth
This may result from the effect of tariffs on import prices, which can be passed on as higher prices for domestic consumers.
Import inflation
Economies that are in the process of industrialisation and experiencing high growth
Emerging economies
A situation of high inflation and unemployment rates, coupled with stagnant economic growth.
What is stagflation?
Expansion, boom, contraction, recession.
Business cycle fluctuations
Unfair price cutting, if countries which are efficient producers of agricultural or manufactured goods, sell their exports at below factor cost in foreign markets.
Dumping
Three reasons for protection
Infant industry argument, to protect domestic employment and to prevent dumping
This organisation replaced the GATT secretariat in 1995 and it monitors developments in world trade and reviews barriers to world trade such as tariffs and subsidies.
World Trade Organisation?
FIVE indicators of globalisation
Trade flows, Investment flows, financial flows, technology transport and communication and international division of labour
A multilateral regional economic forum including 21 Asia Pacific Economies.
Asia-Pacific Economic Cooperation
Describe THREE characteristics of a monetary union.
Regional multilateral agreement between more than 2 economies, own currency, single monetary policy central bank.
Eg. European Union.
High income economies with GNI per capita about $US13,205
Advanced economies
This organisation was formed in 1961 and has 34 member countries. Its main objectives are to promote sustainable economic and employment growth and rising living standards in member countries, whilst maintaining financial stability and contributing to world economic development.
Organisation for Economic Co-operation and Development (OECD)