Globalisation and Economic Impact Study Guide

A comprehensive set of flashcards covering key terms and concepts from the economics lecture on globalisation, trade, and related policies.

Globalisation

The deepening of relationships between countries, reflected in an increasing level of cross-border trade, investment, and migration.

De-globalisation

A reversal of the process of globalisation.

Slowbalisation

A slowdown in the speed of globalisation.

MNCs/TNCs

Multi-national corporations (MNCs) or trans-national corporations (TNCs) that operate in more than one country.

FDI

Foreign Direct Investment - investment made by a company or individual in one country in business interests in another country.

European Union (EU)

A political and economic union of 27 European countries with shared laws and regulations.

Trade Liberalisation

The removal or reduction of trade barriers to allow for freer trade between nations.

Comparative Advantage

The ability of a country to produce a good or service at a lower opportunity cost than another country.

Absolute Advantage

When a country can produce a good at a lower direct cost than another country.

Protectionism

The economic policy of restraining trade between nations through tariffs, quotas, and other restrictive regulations.

Terms of Trade (ToT)

The ratio at which one good can be exchanged for another between two countries.

Capital Account

A component of a country's balance of payments that records all transactions involving the purchase or sale of assets.

Balance of Payments

A record of all monetary transactions between a country and the rest of the world over a specific time period.

Economic Nationalism

Policies that emphasize domestic control of the economy, labor, and capital formation over global capitalism.

Systemic Risk

The risk of collapse of an entire financial system or market, as opposed to risk associated with any one entity.

Intra-regional Trade

Trade that occurs between countries within the same region.

Gross Domestic Product (GDP)

The total value of goods produced and services provided in a country during one year.

Consumer surplus

The difference between what consumers are willing to pay for a good or service versus what they actually pay.

Trade Imbalances

A situation where a country's imports and exports of goods are not equal.

Brain Drain

The emigration of highly skilled or educated individuals from one country to another.

Cyclical Causes of Current Account Deficit

Causes that arise from temporary economic fluctuations, such as an economic boom or recession affecting trade balances.

Structural Causes of Current Account Deficit

Long-term underlying issues affecting an economy's ability to export such as inadequate capital investment or productivity.

J-Curve Effect

A phenomenon that describes the initial worsening of a trade balance following a depreciation before it improves.

Welfare Loss

A reduction in the economic well-being of an individual or society due to market distortions.

Rising Inequality

An increasing disparity in income and wealth distribution within a population.

Environmental Degradation

The deterioration of the environment through depletion of resources such as air, water, and soil.

Knowledge Transfer

The process of transferring skills, knowledge, and expertise across different sectors or societies.

Geographical Patterns of Trade

Patterns identifying how and with whom countries trade based on location and proximity.

Exchange Rate

The value of one currency for the purpose of conversion to another.