OCR A-LEVEL ECONOMICS - MACRO- GLOBAL exam |complete study guide with updated answers|Get a pass on your first trial.

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OCR A-LEVEL ECONOMICS -
MACRO- GLOBAL exam |
complete study guide with
updated answers|Get a pass on
your first trial.

Define bilateral exchange rates - CORRECT ANSWERS✔️✔️The value of one
currency expressed in another currency.


Define effective exchange rates - CORRECT ANSWERS✔️✔️Describes the
strength of one currency to a basket of other currencies using an index.


Define exchange rates - CORRECT ANSWERS✔️✔️The purchasing power of a
currency in terms of what it can buy of other currencies.


Define fixed exchange rate - CORRECT ANSWERS✔️✔️The value of the currency
is set against the value of another and that exchange rate does not change.


Define floating exchange rate - CORRECT ANSWERS✔️✔️The value of the
currency is determined purely by market demand and supply of the currency.


Define hybrid exchange rate system - CORRECT ANSWERS✔️✔️A combination of
the characteristics of fixed and floating exchange rates; the currency fluctuates
but it doesn't float on a fully free market. e.g managed float




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Define nominal exchange rates - CORRECT ANSWERS✔️✔️The weight of one
currency relative to another, without being adjusted for inflation.


Define real exchange rates - CORRECT ANSWERS✔️✔W ️ hen the exchange rate is
adjusted for inflation to give a more accurate reflection of purchasing power.


Define trade-weighted exchange rate - CORRECT ANSWERS✔️✔M ️ easures how
the exchange rate is changing against other currencies in general, rather than a
single currency.


Define absolute advantage - CORRECT ANSWERS✔️✔W ️ hen a country can
produce a good more cheaply in absolute terms than another country.


Define comparitive advantage - CORRECT ANSWERS✔️✔️When a country is able
to produce a god more cheaply relative to other goods produced; it has a lower
opportunity cost


Define globalisation - CORRECT ANSWERS✔️✔️The growing interdependence of
countries and the rapid rate of change it brings about; movement towards free
trade of goods and services, free movement of labour and capital and free
interchange of technology and intellectual capital.


Define international competitiveness - CORRECT ANSWERS✔️✔️The ability of a
country to compete effectively and become attractive in international markets.


Define J-curve - CORRECT ANSWERS✔️✔️A current account will worsen before it
improves following a depreciation of the currency.




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Define Marshall- Lerner condition - CORRECT ANSWERS✔️✔️The sum of the
price elasticities of imports and exports must be more than one if a currency
depreciation is to have a positive impact on the trade balance.


Define terms of trade - CORRECT ANSWERS✔️✔️The ratio of an index of a
country's export prices to an index of its import prices.


Define customs union - CORRECT ANSWERS✔️✔️The removal of all tariff barriers
between members and the introduction of a common external tariff.


Define economic union - CORRECT ANSWERS✔️✔️A common market with a
customs union and free movement f goods, services, capital and labour.


Define embargos - CORRECT ANSWERS✔️✔C
️ omplete ban on trade with a
particular country


Define free trade - CORRECT ANSWERS✔️✔️Trade with no barriers or
restrictions


Define free trade areas - CORRECT ANSWERS✔️✔W ️ here countries agree to
trade goods with other members without protectionist barriers.


Define monetary union - CORRECT ANSWERS✔️✔️Two or more countries with a
single currency.


Define protectionism - CORRECT ANSWERS✔️✔️When the government enact
policies to restrict the free entry of imports into their country, such as trips and
quotas.

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