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20 Cards in this Set
- Front
- Back
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What is the development gap? |
Differences in levels of economic and social well-being between richest and poorest people on the planet |
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What is the gross domestic product? |
Measure of the financial value of the goods and services produced within a territory |
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What is the human development index? |
Measurement of economic and social development Takes into account income per capita, life expectancy and adult literacy |
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What economic groupings exist? |
LDC's- Least developed countries NIC's- Newly industrialised countries Ex-Soviet states OPEC- Organisation of Petroleum Exporting Countries OECD- Organisation of Economic Cooperation and Development |
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What trade blocs exist? |
NAFTA EU Caricom Mercosur Asean Comesa |
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Name some examples of NIC's |
Brazil Mexico Argentina Asian Tigers- Hong Kong, Singapore, South Korea and Taiwan |
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Why is Saudi Arabia one of the wealthiest countries in the world? |
High petrodollar earnings GDP of $350 billion |
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What is the issue with wealth in OPEC's? |
It's not evenly distributed among citizens |
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What is the difference between OPEC's and OECD's? |
OECD's- Organisation of 30 nations where high levels of wealth is more evenly distributed among citizens Standard of living is good |
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Who are part of the G7? Why are they part of this group? |
USA, Canada, UK, Germany, France, Italy and Japan Most powerful countries in the world
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Why are trade blocs different from economic groupings? |
1. Free trade 2. Trade blocs contain countries with varying levels of economic development Allows TNC's to exploit human resources e.g Mexico and USA part of NAFTA |
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What is the spatial division of labour? |
Moving low skilled work abroad to places where labour costs are low High skilled jobs retained in country of origin
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Why do nations join the EU |
Free trade encouraged by removal of internal tariffs Trade blocs protect members by establishing a common external tariff for foreign exports EU has common currency Some have political legislation EU members eligible for Structural Funds to develop economies Farm subsidies benefit agricultural producers |
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Why does the removal of internal tariffs bring benefits to nations of the trade bloc? |
-Markets grow -Firms that have comparative advantage in production of particular product prosper because they can specialise -Enlarged market increases demand, lowering manufacturing costs Improved economies of scale means products are sold more cheaply -Smaller national firms can merge to form TNC's, making operations more cost-effective |
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Why are TNC's global companies? |
-Build their businesses by buying foreign firms -Manufacturing work is subcontracted to third parties -Manufacturing TNC's are assembly industries, relying on a chain of suppliers |
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What is a branch plant? |
Factory built in a country by a TNC which has its headquarters elsewhere |
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What is the service sector tomorrow? |
Consists of businesses that produce no physical product They sell products of manufacturing or offer a service such as education or tourism
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Why may TNC's be viewed as a bad thing? |
1. Tax avoidance means governments find it harder to raise revenues, provide services 2. Growing global wealth divide 3. Environmental degradation |
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What are the benefits of TNC's? |
1. Raising living standards- TNC's invest in economies of developing countries 2. Transfer of technology 3. Political stability 4. Raising environmental awareness- Large firms try to establish green credentials |
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How do TNC's affect global wealth? |
1. TNC's exploit workers in poor countries, limiting their development 2. TNC's bring in FDI to nations 3. Workers will spend their money, stimulating growth of local services 4. By comparison, the wages from the TNC's will be better than other unskilled work in that particular poor country 5. More effective at spreading wealth fairly around the world |
