Globalisation
Globalisation means economies become more ___________ through free _____, FDI and mobility of ______.
interconnected, trade, labour
Trade gives households a wider _____ of goods to consume at lower ____ , helping to improve living standards. Trade also allows countries to ______ in producing certain products
choice, prices, specialise
MNCs engage in ___ to take advantage of lower ____ costs, gain access to __ ___ used in production, and reduce transport costs when selling overseas.
FDI, labour, raw materials
Demand for the GBP increases when other countries want to purchase UK _____ or if UK ___ __ rise. Increasing demand leads to _____ of the currency.
exports, interest rates, appreciation
Economic development means increasing the ____ and quality of life of a nation. This involves reducing ___ , improving living standards, and meeting people’s basic ___ such as food and shelter.
well-being, poverty, needs
Globalisation allows firms to increase ______ and sell goods overseas in order to achieve economies of _____ and lower ____.
output, scale, LRAC
Countries enforce _______ policies to help domestic industries but this leads to higher ____ for consumers and may lead to _______ from other countries.
protectionist, prices, retaliation
In reality, MNCs often create poor working _____, deplete ____ ___ and gain too much influence over _____ in other countries.
conditions, natural resources, legislation
Supply of the GBP increases when we want to purchase _____ from other countries or if __ ___ in other countries are higher than in the UK. Increasing supply of the GBP leads to _____.
imports, interest rates, depreciation
Policies to promote development include:
- _____ policies such as spending on investment, education and healthcare
- _____ strategies such as privatisation and deregulation as well as giving ___ ____ to foreign firms
interventionist, market-based, tax breaks
____ suffer from high ________, low GDP and poor infrastructure. They rely on exporting _______ commodities.
LDCs, unemployment, primary
A country has an _____ advantage if it can produce more of a good than other countries using the same amount of resources. A country has a _____ advantage if it produces a good at a lower ___ ____.
absolute, comparative, opportunity cost
A current account deficit can be reduced using the three “D”s which are _____, _____, and direct controls. It can also be reduced through ____ policy.
Devaluation, deflation, supply-side.
_____ means weakening and _____ means strengthening a currency in a fixed exchange rate system. The central bank maintains the fixed rate by buying and selling its currency in FX markets using its _____ .
Devaluation, revaluation, reserves
HDI has three components:
- GDP per capita in USD adjusted for ___ ___ ___
- ___ ___ at birth
- mean and expected __ _ ___
purchasing power parity, life expectancy, years of schooling
___ often put local firms out of business and exploit _____ by paying them low wages. Dominance by global brands also destroys local ______.
MNCs, workers, cultures
A ___ __ is a free-trade area that also has a common external tariff applied to outside countries. A ___ __ is a customs union that also allows free mobility of labour and _____.
customs union, common market, capital
Charging tariffs and devaluing the currency are called ________ policies. Deflating the economy and reducing demand for _____ is called an ______ policy.
expenditure-switching, imports, expenditure-reducing
A floating exchange rate can cushion the economy during an ___ __. However, volatile exchange rates create _____ for firms when planning for trade and ___.
economic shock, uncertainty, FDI
Barriers to development include:
- A lack of ___ __ to protect the owners of assets
- ____ leaders and officials
- A lack of stable political and banking _____
property rights, corrupt, institutions
MNCs argue that they benefit LDCs by creating ____, increasing ___ revenue and paying higher _____ to local workers.
jobs, tax, wages
The WTO works to reduce trade _____ and promote free trade. This has led to the growth of trade _____. The WTO also helps to settle trade _____ between members.
barriers, blocs, disputes
A large current account _____ indicates that a country may not be ______ _____ due to lack of investment and poor productivity. This prevents them from creating ____ and boosting growth.
deficit, internationally competitive, jobs
___ ___ are groups of countries that share a common currency. This creates greater certainty for firms engaging in ____ as well as greater price _____ for consumers.
Currency unions, trade, transparency
The ___ provides loans to countries with BOP problems. The __ __ provides long-term loans to LDCs to fund capital investment and reduce ______.
IMF, World Bank, poverty