Economy- area/country where goods/services are produced/sold/bought
GDP- total value of goods/services produced in a country within a specific time frame
Emerging economies- economies with increasing growth rate but low income per
capita/significant risk, e.g. India, have growing middle class (increasing incomes)
Industrialisation- rise in manufacturing in the economic activity of a country, sped up
by globalisation
Economic growth rate- rate GDP changes from one year to another
Uk’s growth lower than emerging economies- had decline in manufacturing as
businesses outsource (lower labour costs/access to raw materials)
Impact of economic growth- potential increased profits, reduced production costs
(lower labour costs/cheaper raw materials), increased trade opportunities (demand
increases with more disposable income), increase in investment (FDI from businesses
wanting to benefit from growing economies), reduced unemployment (more demand
requires more production), improved public services (government makes more tax
revenue)
Indicators of growth- GDP per capita (dividing total output by number of people, high
GDP per capita associated with high living standard, analysed over time to see
improvement), health (allows businesses to judge quality of workforce, life
expectancy/infant mortality/access to healthcare), literacy (percentage of adults that
can read/write, shows quality of workforce), HDI (combined measure of life
expectancy/education/income, measured from 0-1, looks as country holistically
(doesn’t account for inequalities within), some countries lack reliable data)
Imports- goods/services bought by people/businesses in one country from another
country
Exports- goods/services sold by domestic businesses to people/businesses in other
countries
Specialisation- when country/business decides to focus on producing particular
good/service, increase the quantity/quality of that good (economies of scale, allow
them to lower prices/be more competitive or increase profit margins)
FDI- investment by foreign firms into setting up operations/buying assets in another
country, resulting in part/full ownership of domestic firms, mergers/takeovers/joint
ventures (combination of two/more businesses to form single enterprise in order to
complete specific goal, share risks/rewards), increases economic growth/job
opportunities/knowledge from foreign investors, inward FDI (foreign businesses
invests in local economy), outward FDI (domestic business expands into foreign
country)
Trade liberalisation- removal/reduction of barriers to trade between countries,
increased market size
(more output, economies of scale), reduced costs (more options to source raw
materials cheaper), access to better people if free movement like EU, domestic firms
have more competition (infant industries especially struggle to compete), dumping
, (selling products abroad at unfairly low prices to get rid of excess, domestic industries
can’t compete)
Globalisation- economic integration of different countries, economies drawn deeper
together/more interconnected, more freedom in border crossings/advancements in
technology/trade liberalisation
Factors contributing to increased globalisation- political change (governments have
different attitudes to trade, remove barriers), cheaper transport/communication
(containerisation allows transporting larger amounts (economies of scale),
technological advancement), increased significance of transnational companies
(businesses that operate in more than one country, more pressure for countries to
engage in free trade), increased FDI flows (creates jobs/wealth, businesses can set up
in countries they would’ve faced trade barriers from), migration (movement of people
from one location to another, workers can move to find work), increased labour force
(more people working=more income=more demand, more available labour leads to
falling wages (reduces business costs)), structural change (country/industry/market
changes sector they operate in, e.g. UK shifted from manufacturing to tertiary)
Protectionism- policies used when government seeks to protect domestic industries
from foreign competition, makes foreign owned products less attractive
Tariff- tax placed on imported goods from other countries, increases the price of
imported goods to shift demand to domestic businesses, more likely to purchase from
domestic businesses, protect infant industries so they can become more globally
competitive, increase government tax revenue, reduces dumping (makes it so they
can’t sell below domestic prices), if domestic businesses import materials they’ll be
hit by tariff, reduces competition (domestic firms may slack, become more
inefficient/poor quality for consumers), reduces consumer choice (unable to afford
increased price of foreign goods), retaliation
Import quotas- government imposed limit on amount of particular product allowed
into the country, domestic businesses face less competition/get higher market share,
demand met more by domestic producers, domestic businesses have increased
demand (hire more workers, reduced unemployment, job security), they can be
changed easily as market conditions change, less confrontational than tariffs, limit
supply of a product (likely to increase price), may generate tension with trading
partners, domestic firms may become inefficient over time (reduced competition),
limit consumer choice
Government legislation- creation of new laws by government, impose laws to restrict
import, protect customers/businesses, strict regulations to be allowed into country,
e.g. UK ban chicken from US as they wash carcases with chlorine, limited competition
allows domestic firms to grow, can lead to retaliation
Subsidies- money paid to a firm, payments that lower costs of production for domestic
businesses, reduced costs allow them to lower prices (more competitive
internationally, may become insufficient if relying on costs being subsidised
Trade embargo- partial/complete ban of trade with a country, usually political
GDP- total value of goods/services produced in a country within a specific time frame
Emerging economies- economies with increasing growth rate but low income per
capita/significant risk, e.g. India, have growing middle class (increasing incomes)
Industrialisation- rise in manufacturing in the economic activity of a country, sped up
by globalisation
Economic growth rate- rate GDP changes from one year to another
Uk’s growth lower than emerging economies- had decline in manufacturing as
businesses outsource (lower labour costs/access to raw materials)
Impact of economic growth- potential increased profits, reduced production costs
(lower labour costs/cheaper raw materials), increased trade opportunities (demand
increases with more disposable income), increase in investment (FDI from businesses
wanting to benefit from growing economies), reduced unemployment (more demand
requires more production), improved public services (government makes more tax
revenue)
Indicators of growth- GDP per capita (dividing total output by number of people, high
GDP per capita associated with high living standard, analysed over time to see
improvement), health (allows businesses to judge quality of workforce, life
expectancy/infant mortality/access to healthcare), literacy (percentage of adults that
can read/write, shows quality of workforce), HDI (combined measure of life
expectancy/education/income, measured from 0-1, looks as country holistically
(doesn’t account for inequalities within), some countries lack reliable data)
Imports- goods/services bought by people/businesses in one country from another
country
Exports- goods/services sold by domestic businesses to people/businesses in other
countries
Specialisation- when country/business decides to focus on producing particular
good/service, increase the quantity/quality of that good (economies of scale, allow
them to lower prices/be more competitive or increase profit margins)
FDI- investment by foreign firms into setting up operations/buying assets in another
country, resulting in part/full ownership of domestic firms, mergers/takeovers/joint
ventures (combination of two/more businesses to form single enterprise in order to
complete specific goal, share risks/rewards), increases economic growth/job
opportunities/knowledge from foreign investors, inward FDI (foreign businesses
invests in local economy), outward FDI (domestic business expands into foreign
country)
Trade liberalisation- removal/reduction of barriers to trade between countries,
increased market size
(more output, economies of scale), reduced costs (more options to source raw
materials cheaper), access to better people if free movement like EU, domestic firms
have more competition (infant industries especially struggle to compete), dumping
, (selling products abroad at unfairly low prices to get rid of excess, domestic industries
can’t compete)
Globalisation- economic integration of different countries, economies drawn deeper
together/more interconnected, more freedom in border crossings/advancements in
technology/trade liberalisation
Factors contributing to increased globalisation- political change (governments have
different attitudes to trade, remove barriers), cheaper transport/communication
(containerisation allows transporting larger amounts (economies of scale),
technological advancement), increased significance of transnational companies
(businesses that operate in more than one country, more pressure for countries to
engage in free trade), increased FDI flows (creates jobs/wealth, businesses can set up
in countries they would’ve faced trade barriers from), migration (movement of people
from one location to another, workers can move to find work), increased labour force
(more people working=more income=more demand, more available labour leads to
falling wages (reduces business costs)), structural change (country/industry/market
changes sector they operate in, e.g. UK shifted from manufacturing to tertiary)
Protectionism- policies used when government seeks to protect domestic industries
from foreign competition, makes foreign owned products less attractive
Tariff- tax placed on imported goods from other countries, increases the price of
imported goods to shift demand to domestic businesses, more likely to purchase from
domestic businesses, protect infant industries so they can become more globally
competitive, increase government tax revenue, reduces dumping (makes it so they
can’t sell below domestic prices), if domestic businesses import materials they’ll be
hit by tariff, reduces competition (domestic firms may slack, become more
inefficient/poor quality for consumers), reduces consumer choice (unable to afford
increased price of foreign goods), retaliation
Import quotas- government imposed limit on amount of particular product allowed
into the country, domestic businesses face less competition/get higher market share,
demand met more by domestic producers, domestic businesses have increased
demand (hire more workers, reduced unemployment, job security), they can be
changed easily as market conditions change, less confrontational than tariffs, limit
supply of a product (likely to increase price), may generate tension with trading
partners, domestic firms may become inefficient over time (reduced competition),
limit consumer choice
Government legislation- creation of new laws by government, impose laws to restrict
import, protect customers/businesses, strict regulations to be allowed into country,
e.g. UK ban chicken from US as they wash carcases with chlorine, limited competition
allows domestic firms to grow, can lead to retaliation
Subsidies- money paid to a firm, payments that lower costs of production for domestic
businesses, reduced costs allow them to lower prices (more competitive
internationally, may become insufficient if relying on costs being subsidised
Trade embargo- partial/complete ban of trade with a country, usually political
