Edexcel A level Economics Theme 4Exam 2024 Questions & Answers 100% Correct!

Globalisation - ANSWERSthe ever-increasing integration of world markets into a single world market Multinational company - ANSWERSa company with significant production operations in two or more countries Transfer pricing - ANSWERSan accounting technique through which multinational companies can reduce taxes on profits by selling goods at a low cost internally from a high-tax country to another part of the company in a low-tax country Absolute advantage - ANSWERSwhen a country can produce a good more cheaply in absolute terms than another Comparative advantage - ANSWERSwhen a country can produce a good more cheaply relative to other goods domestically relative to another Theory of comparative advantage - ANSWERScountries will find it mutually advantageous to trade if the opportunity cost of production of goods differs Terms of trade - ANSWERSthe ratio of import prices to export prices // (index of export prices÷index of import prices) * 100 Bilateral trade agreement - ANSWERSa regional trade agreement between two countries Common market - ANSWERSa customs union where both labour and capital have freedom of movement within the area and where product standards and laws concerning free movement of goods and services are common between countries Customs union - ANSWERSa group of countries between which there is free trade in goods and services and a common external tariff is applied on non-members Economic union - ANSWERSa group of countries where the economies of member countries are as fully integrated economically as different regions of a country Fiscal union - ANSWERSa group of countries where a central body has some powers over fiscal policy