5563730
Description
Flashcards by julia_matic, updated more than 1 year ago
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Created by julia_matic
almost 8 years ago
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| Question | Answer |
| Globalisation | Refers to the opening up of international borders to the flow of trade, investment, immigration, information and technology |
| Trade Liberalisation | Reduction or removal of trade barriers and movement toward free trade |
| Trade Intensity | The proportion of GDP that are made up of imports and exports Trade Intensity= (X-M) / GDP * 100 |
| Multi-national corporations | A business that has a headquarter in a country but operates in many others |
| International Competitiveness | Ability of a firm or a nation to offer goods and services that meet the quality standards of the local and world markets at prices that are competitive and provide adequate returns on the resources consumed in producing them. |
| Contagion | Economic growth in one country can have a positive or negative effect on another |
| Trade Bloc | A set of countries engaging in international trade together, and are usually related through a free trade agreement or other association. |
| Economies of scale | as output increases, cost of production of goods and services falls. |
| Protection | The artificial advantage provided by the government to assist infant industries to compete against MNCs |
| Tariff | Tax on imported goods. Aim to make imports expensive to support domestic firms |
| Subsidy | Financial assistance by the government to help new established industries compete |
| Quota | Limit on the quantity of goods that can be imported into the country |
| Embargo | Total ban on imports |
| Free Trade | Trading with other countries that does not have any trade barriers |
| Absolute Advantage | A country has absolute advantage if it can produce goods and services more efficiently than another |
| Comparative advantage | the ability of a country to produce goods and services more efficiently at a lower opportunity cost than another |
| Balance of Payments | The record of all economic transactions between the residents of a country and the rest of the world in a particular period |
| Current Account | records financial transactions in goods, services, primary and secondary income. |
| Current account deficit | When payments for goods, services, primary and secondary income exceeds receipt |
| Current account surplus | When receipts for goods, services, primary and secondary income exceeds payments |
| Direct Investments | Ownership of 10% or more of a business |
| Portfolio Investment | Ownership of less than 10% |
| Merchandise Trade | Difference between exports and imports (goods only) |
| Balance of Trade | difference of exports and imports (bothe goods and services) |
| Capital and Financial Account | records of all financial transactions between capital and financial account |
| Terms of trade | Relative price of imports and exports or the ratio of export price to import price ToT= XPI / MPI * 100 |
| Exchange rate | The price of one country's currency in terms of another country's currency |
| Trade weighted index | price of a currency in terms of a basket of currencies of he major trading partners |
| Foreign exchange market (ForEx) | Buying or selling of foreign currencies |
| Floating exchange rate | Where the price of the currency is determined by market forces of demand and supply |
| Fixed exchange rate | Price of the currency does not change regardless of demand and supply for that currency |
| Appreciation | The strengthening of currency against the trading partners |
| Depreciation | the decline in value of the price of our currency |
| Foreign debt | is the sum of money that a country's residents, both public and private, owe to the rest of the world |
| assets | what we own |
| Liabilities | What we owe to the rest of the world |
| Net worth | the difference between the assets and liabilities (assets - liabilities) |
| Debt servicing ratio | refers to interest payments as a proportion of export earnings |
| Gross foreign debt | the total amount borrowed from non-residents |
| Net foreign debt | difference between what we owe and what other owe us |
| Foreign investment | stock of financial assets in a country owned by foreign residents |
| foreign equity | sale of Australian assets |
| trade creation |
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