Topic 10

• Exports

  Product or service sold abroad.
• Imports

  Good or service brought into one country from another.
• Visibles

  International trade in physical manufactured goods.
• Invisibles

  The transfer of services, including finance and insurance.
• Interdependence

  The reliance of countries on each other resulting from specialisation and free trade.
• Exchange rates

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

  When the value of the currency rises in value to another.
• Depreciation

  When the value of the currency falls in value to another.
• Free trade

  Trade without restrictions such tariffs and quotas.
• EU single market

  Refers to the EU as one territory without any internal borders or other regulatory obstacles to the free movement of goods and services.
• World Trade Organisation

  Deals with the global rules of trade between nations. Its main function is to ensure that trade flows smoothly, predictably and freely as possible.
• Globalisation

  The worldwide movement toward economic, financial, trade, and communications integration.
• Developed countries

  A country with a relatively high level of economic growth and mature institutions and infrastructure.
• Less developed countries

  A country that has lower economic growth and income and weaker infrastructure and institutions.
• Multinational companies

  Have operations in at least one country other than its home country.
• Sustainability

  Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
• Advantages of free trade

  • Lower prices for consumers
  • Greater choices for consumers
  • The ability to acquire needed resources
  • Increased competition
• Disadvantages of free trade

  • Over production
  • Environmental destruction
  • Decreased working conditions
• Benefits of globalisation

  • MNCs bring jobs and skills
  • New jobs, therefore increased GDP
  • Greater choice for goods and services
• Drawbacks of globalisation

  • Richer countries tend to benefit
  • MNCs drive out smaller, local companies
  • Not good for cultural diversity