APHG Unit 7 Vocabulary

Economic Restructering

a significant shift in production, employment, investment, trade patterns, or underlying economic systems and processes

Offshoring

the process of relocating a business process or service to another country

Outsourcing

when a business contracts out a service or job to an external provider in order to reduce their costs and increase their efficiency

Economies Of Scale

as a company grows, it is able to reduce the average cost to produce its product

International Division of Labor

a concept that describes how countries utilize their comparative advantage to specialize in different economic activities, resources, and capabilities

Special Economic Zones (SEZ’s)

regions within a country that provide different economic incentives with the objective of attracting foreign investment and promoting economic growth

Free Trade Zones (FTZ’s)

a region within a country where imported goods can be stored and processed without being subject to tariffs or trade barriers

Export Processing Zones (EPZ’s)

regions within a country’s border that offer special economies regulations and incentives to promote the production of goods and services for export

Multiplier Effect

a phenomenon when an original investment by an individual, business, government, or organization leads to a chain reaction of spending and increased economic activity

Fordism

a system of production that emphasizes mass production of standard goods

Post-Fordism

a system of production that emphasizes more flexible production methods where workers are trained in multiple tasks and produce custom

Just-In-Time Delivery

a production and inventory control system where products and materials are delivered to the manufacturing plant precisely when they are needed for production process

Growth Poles

Specific regions, cities, or economic sectors that are considered centers of economic growth/development

Capitol Investment

the funds or resources that a company or individual put into an activity, project, or business with the exception on generating future profits

Complementarity Index Score

a measure used in economies and trade to access compatibility between the products and services that the two countries produce and trade with each other

Comparative Advantage

the ability of a country, individual, or organization to produce a good or service at a lower opportunity cost than another country, individual, or organization

Trade Deficit

a situation where a country imports more goods and services that it exports

Neoliberalism

an economic and political ideology that emphasizes individual freedom over government control, free markets, and free trade

Free Trade

international trade where there are no restrictions or barriers that increase the cost of trade or prevent trade from occurring

Primary Sector

jobs focusing on the extraction of natural resources

Secondary Sector

jobs focusing on the processing and manufacturing of extracted raw materials

Tertiary Sector

jobs focusing on anything related to the sale or exchange of goods; service-based jobs

Quaternary Sector

jobs focusing on processing info and human knowledge; involves technology, information, financial planning, research, and development

Quinary Sector

jobs focusing on decision-making and policy-making that drives the other sectors of the economy; the highest level of economic activity

GDP (gross domestic income)

total value of all goods and services produced within a specific period of time

Core Countries

countries with the most advanced economies and higher standard or living, typically having political and economic influence

Semi Periphery Countries

countries with emerging economies an are industrializing, have in increased standard of living

Periphery Countries

countries that rely heavily on the exportation of raw materials to more economically developed countries, low standard of living

Multinational Corporations

a company that has business operation in at one one country other than its home country

Break of Bulk Point

a location where goods are transferred from one mode of transportation to another

Weber’s Lost Cost Theory

industry is situated within the area where the cost of transporting raw materials and the final output is minimized

Agglomeration

clustering of different economic activities and industries in a specific geographic ara

Bulk Reducing Good

a product that becomes lighter and easier to transport as production occurs

Bulk Gaining Good

a product that becomes heavier and more difficult to transport

Formal Economy

economic activities that are recognized by law and are overseen by the government

Informal Economy

economic activities that are not recognized by law or overseen by the government.

GNP (gross national product)

the total economic output produced by a country’s residents and business, regardless of location

GNI (gross national income)

the total amount of income generated by a country’s residents and business, both domestically and abroad

GII (gender inequality index)

a composite index that measures gender based inequalities in health, education, and economic participation

HDI (human development index)

an index that is used to measure the social and economic development of a country

Microloans

small loans provided to individuals or small businesses who are typically excluded from traditional banking services

MicroFinancing

a category of financial services that are for individuals and small business who lack access to traditional banking services

dependency theory

developing countries are dependant on developed countries for their economic growth

Wallerstein’s World System Theory: Core Countries

• purchasers of high-profit consumption goods from semi-periphery and periphery countries

• have high power, control the global economy

• most often exploit raw materials

Wallerstein’s World System Theory: Semi Periphery Countries

• established infrastructure for the exportation of goods, cheaper labor, and less production regulations on goods and services

• leads to more production and exportation of goods from semi-periphery to core

Wallerstein’s World System Theory: Periphery Countries

• economy can become dependant on a few core countries

• leads to exploitation of labor and resources

• resources go to core countries rather than their local economy