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32 Cards in this Set
- Front
- Back
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Linkages between economies
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-Investment- allows for Australia to supplement its domestic savings.
-Tourism -increase Australia's market share of targeted markets- through increasing demand (leisure, Business, school) |
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Linkages between economies
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-Immigration- supplement Australia's small workforce
-trade- stimulus for growth, expands global economy, creates wealth and increases living standards around the world |
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Patterns and Trends
current statistics |
-largest economy is America (9.2% of world GDP)
-Australia only has 1.2% -3 largest economies, Germany, USA, China, make up 25% of world GDP |
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Patterns and Trends
current statistics |
-USA is the worlds largest importer
-China is the worlds largest exporter |
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Patterns and Trends
current statistics (trends) |
-World exports increased by a factor of 50 between 1970-2008
-GDP increased by a factor of 3 -Intensity of trade (imports+exports:GDP) 1977-2008 increased 34%-59% |
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Patterns and Trends
Trends and causes |
-success of WTO and IMF in trade liberalisation
-improvements in transport and communication -have reduced the costs of international commence -In most countries (Australia) trade as a proportion of GDP has been increasing |
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Patterns and Trends
Two way Trading partners |
-China 19.9%
-Japan 11.9% -America 8.9% -Korea 5.4% -Singapore 4.5% |
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Patterns and Trends
determents of trading partners |
-exchange rates: appreciation=exports cheeper
-world economic conditions: GFC, lowered trade=less exports for Australia -domestic economic conditions: high domestic economic activity increases demand for imports and capital |
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Patterns and Trends
determents of trading partners |
relative inflation rates
relative interest rates: high returns on financial capital .. productivity: output per worker natural disasters |
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acronyms
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WTO: World trade organisation
OECD: Organisation for economic co-operation and development MNC’s: Multinational corporations IMF: International monetary fund |
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Acronyms
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GATT: general agreement on Tariffs and Trade
• A treaty created following the conclusion of World War II. The General Agreement on Tariffs and Trade (GATT) was implemented to further regulate world trade to aide in the economic recovery following the war ASEAN: Association of South East Asian Nations. • An organization of countries in southeast Asia set up to promote cultural, economic and political development in the region. ASEAN was officially formed in 1967 with the signing of the Bangkok Declaration. |
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International competitiveness
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the degree to which a country can produce goods and services which meet the test of international markets, whilst simultaneously maintaining and expanding the real incomes of its members of over the long term
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international competitiveness continued
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Affects a countries standard of living
Ultimate objective of any country or economy is to improve the economic welfare or living standards of its members. |
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international competitiveness
how is it measured? |
A nations real unit labour costs (wages: productivity)
a fall in an index of real labour costs implies a increase International competitiveness trade weighted index: Value of Australian dollar relative to our major trading partners if it falls = improved international competitiveness |
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international competitiveness
PPP |
PPP(purchasing power parity): the same product should sell for the same price in different countries once converted to a common exchange rate
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international competitiveness
Novel index's |
A uniform product sold in most countries converted to a common exchange rate
- compare the price of a index that does not reflect differences in labour costs. - Big mac, billy bookcase, and ipad |
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Determents of international competitiveness
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Trade liberalisation - increases international
competitiveness establishment of free trade agreements - increases international competitiveness |
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Determents of international competitiveness
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structural change - reduction in transport
communication and technology : increases international competitiveness individual demand: increased demand= increased international competitiveness |
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determents of international competitiveness
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corporate behaviour - firms have to reduce costs to
pursue higher profits on an international scale economic efficiency - improvements in Dynamic, technical and allocative efficiency. |
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concept of Multinational corporations
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Are very large firms with subsidiaries in one or ore other countries.
world wide they produced a quarter of world GDP |
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concept of Multinational corporations
FDI |
-foreign direct investment, when one firm gains ownership of at least 10% of a foreign firm
-establishment of offshore subsidiaries may overcome some of the disadvantages associated with exporting, such as high transport costs, trade barriers and uncertainty regarding exchange rates -also allows for proximity of demand allowing firm to tailor their product |
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concept of Multinational corporations
reasons for FDI |
growth and expansion plans
size of market : increase consumer base cost reduction: offshoring increase in international competitors (competing MNC) Rise of global consumers: similar interested globally reduction in transport and communication costs |
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concept of Multinational corporations
FDI benefits |
recipient
-transfer of technology -inflow of investment: employment income and output -tax revenue parent -boast local brand -inflow of profit |
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concept of Multinational corporations
FDI costs |
large MNC'S may exploit domestic markets as a monopoly power
profits are likely to flow back into the parent country not the host offshoring: results in Structural unemployment |
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discuss the concept of Globalisation
definition |
"the closer integration of countries and peoples of the world brought about by the enormous reduction of costs of transportation and communication, and the breaking down of artificial barriers to the flows of goods, services, capital, knowledge and peoples across boarders.
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discuss the concept of Globalisation
Data |
-Value of world exports as a percentage of GDP increased
from 19%-29% from 1980-2010 -FDI increased from 6%-30% from 1980-2010 -the number of internet users from 0.1%-30% 1990-2010 -number of mobile phone subscriptions 0.2%-78% 1990-2010 number of international tourist arrivals increased 4 times 1980-2010 |
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discuss the concept of Globalisation
indicators |
trade in goods and services
-manufactured goods increased 100x past 50 years -exports% of GDP 14-24% 1970-2009 growth in Foreign direct investment (FDI) |
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discuss the factors facilitating Globalisation
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-liberalisation of markets to the flows of goods, services, knowledge, people and investment
-advances in transportation and communication "death of the distances" -advances in information and technology and the internet have allowed the trade of services |
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Positive and negative outcomes of Globalisation
negatives (ethical) |
number of ethical
-worsens poverty in developing countries -encourages use of child labour |
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Positive and negative outcomes of Globalisation
negatives (economical) |
-creates job loses through structural unemployment
-removes cultural diversity (thinking outside the box) -contributes to income inequality -can destroy domestic firms and markets |
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Positive and negative outcomes of Globalisation
positives (ethical) |
-Has allowed for the closer integration of different cultures
-has brought to light many domestic issues (women's rights) to the world as a whole |
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Positive and negative outcomes of Globalisation
positives (economical) |
-greater variety of goods and services
-lower production costs -more competitive -more and better employment opportunities -greater drive for innovation and technological advancement -greater world and domestic economic growth -increased economic efficiency -improvements in living standards |
