The Global Economy - Flashcards

A set of Q&A flashcards covering key concepts from the lecture notes on the global economy, including definitions, organisations, trade laws, and positive/negative effects.

What is economic globalisation?

The increasing interdependence of world economies, where the flow of goods, services, and income rises and markets expand, resulting in a global economy.

How can economic globalisation be simply defined?

The process by which businesses, organisations, and countries begin operating on an international scale, increasing interdependence.

What is the global economy?

A shared economy among nations—the interconnected economic activities that occur within and between countries.

How does the global economy operate in one word?

Transactions—the exchange of a variety of products between countries (e.g., fruits, foods, oils, weapons).

Name one key characteristic of the global economy: Globalisation.

A process by which economies, societies, and cultures become integrated through trade, communication, immigration, and transportation.

What is international trade?

The exchange of goods and services between different countries; an outcome of globalisation.

What is international finance?

A primary feature of the global economy dealing with currency exchange rates and monetary policy.

What is global investment?

Investment not constrained by geographical boundaries, typically via foreign direct investment (FDI).

What does the World Trade Organization (WTO) do?

An international organization overseeing global trade rules to keep trade flowing smoothly, predictably, and freely, supporting development and inclusivity.

What is UNCITRAL?

The United Nations Commission on International Trade Law, the UN’s core legal body for international trade law that harmonises and modernises trade law.

What are International Trade Laws?

Laws implemented by countries with help from the WTO and UNCITRAL that govern cross-border trade and balance interests to facilitate flow of goods and services.

What is Export Credit Insurance (ECI)?

Insurance protecting exporters against non-payment by foreign buyers, covering commercial risks (like slow payment) and certain political risks (war, expropriation), including currency inconvertibility and regulatory changes.

What are International Intellectual Property Rights (IPR)?

Laws governing creation, protection, sharing, and use of intellectual property, including patents, trademarks, and copyrights.

What are International Patents?

Patents that protect inventions across borders in multiple jurisdictions.

What are International Trademarks?

Trademark protections extended to multiple countries to safeguard brand identifiers.

What is International Copyright?

Protection of original works across borders (literary, artistic, technical, etc.).

What is a positive effect of free trade?

It enables countries to specialise based on comparative advantage and can help workers find jobs in other countries when unemployment is high.

What is another positive effect: Increased economies of scale?

Specialisation of production reduces average costs and lowers prices for consumers.

What is another positive effect: Increased investment?

Easier attraction of short-term and long-term investments due to participation in the global economy.

What is a negative effect: Global economic inequality?

Unequal distribution of income and resources between countries and regions.

What is a negative effect: Uneven economic development?

Unequal distribution of economic growth and progress across different regions and countries.

What is a negative effect: Global poverty?

Persistent poverty across the world due to inequality and uneven development.

What is a negative effect: Environmental depletion and global warming?

Depletion of non-renewable resources and environmental damage contributing to climate change.

What is a negative effect: Vulnerability to crises?

Increased susceptibility to the effects of economic and financial crises because economies are interconnected.

What is a negative effect: Geopolitical tensions?

Rising tensions and conflicts between nations in a globally interconnected economy.