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Globalisation Keeping the Gains Executive Summary List 15 economic terms/concepts mentioned in this introductory section. Attempt an explanation for each. International trade The exchange of goods and services between countries. Investment The act of providing new capital assets for use in the production process, increasing the stock of capital assets available. Exporting Goods and services produced in Australia and sold overseas. Foreign investment Funds invested in overseas markets by Australian residents. The funds may be borrowed by both the overseas government and private sector. Local investment Capital markets The market where buyers (borrowers) and sellers (lenders) exchange money at the going price (the rate of interest). Infrastructure services The network of services in an economy that are essential to the production and distribution processes (transport, communication, electricity, water supply, road and rail networks). World Trade Organisation (WTO) The successor to the General Agreement on Tariffs and Trade (GATT). The World Trade Organisation addresses a range of issues relevant to international trade. Domestic policies Tariffs A tax on imports. It can be levied with the aim of increasing government revenue or it can be designed to protect domestic industries from the competition of cheaper imports. Labour markets Taxation Government revenue raised to finance spending programs. Inflation A situation in which there is a rise in the general price level sustained over a period of time. Macroeconomic policies Government economic policies that focus on the overall performance of the economy in terms of such aggregates as demand, production and economic activity. FDI Chapter 1: Globalisation supports growth and equity 1.1: What is meant by the term ‘Globaliser’? Globalisers are defined as the top one third of 72 developing countries in terms of their growth in trade as a ratio of GDP between 1975-79 and 1995-97 in constant local currency units. 1.2: Explain the difference between an ‘Open Economy’ and a ‘Closed Economy’. 1.3: List the benefits of trade. · It encourages economies to specialise and produce in areas where they have a relative cost advantage over other economies. Eventually, economies the benefit as they will employ more of their human, physical and capital resources in sectors where they get the highest returns in open international markets. · Trade expands the markets local producers can access, allowing them to produce at the most efficient scale to keep down costs. Even for populated developing economies, low incomes made producers’ potential local market small, so trading with the world is vital. · Trade diffuses new technologies and ideas, increasing local workers’ and managers’ productivity. 1.4: Can globalisation help world poverty?
Approximate Word count = 1683
Approximate Pages = 6.7
(250 words per page double spaced)
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