CHAPTER ONE Economics_Half_Yearly_Jade

CHAPTER ONE Economics_Half_Yearly_Jade - Topic One: The...

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Topic One: The Global Economy TOPIC ONE: THE GLOBAL  ECONOMY 1.FEATURES OF A GLOBAL ECONOMY     NATURE OF GLOBALISATION AND THE  GLOBAL ECONOMY 1. The Global Economy     The global economy is the  world economy it reflects the total amount of  measurable economic activity going on in the world. It is where  individual countries are increasingly linked to each other and changes  in an economy can have ripple effects on the other. 2. Gross World Product (GWP     )   GWP is measured by adding together the outputs of the world  economies . IMF report estimates a GWP of  US$40 714 billion . GWP figures may vary significantly and are difficult to measure as: - inflation rates vary  in different countries - exchange rates vary  in different countries  - variations in statistical methods  of calculating GDP - inaccuracies  may occur when collecting data - government policies  relating to tax can vary 3. Globalisation    
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Topic One: The Global Economy Globalisation refers to the increased integration between countries and  economies and the increased impact of international influences on all  aspects of life and economic activity. a) Trade b) Investment and Technology c) Finance  d) Labour Trade International trade refers to all economic transactions which take place  between individuals, business firms and governments in different  countries. Countries trade because it’s beneficial economically (can be political reasons  too). It enables countries to specialise. Trade liberalisation has increased  world trade flows. Trends :   Trade has become  more globalised . World economies have become  increasingly integrated . Increase in international specialisation. World trade is  not evenly shared by all countries . OECD countries still have the worlds leading merchandise exporters. Increase in trade in the service sector  eg. Transportation. Increase in importance of intra-industry  trade eg. Export cars,  import cars. Increase in component parts (TNC) Increase in financial capital flows. US$ 7.1 trillion in 1990 to US$ 12.4 trillion 2001. GWP growing 6 times its value while world trade is 10 times  bigger than its 1950 level. Key Influences:  TNCs, newly implemented ‘global production  processes’ and free trade.
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Topic One: The Global Economy Investment and Technology Investment refers to the creation of new capital. Investment can originate  domestically or internationally. Two types of international sources:
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CHAPTER ONE Economics_Half_Yearly_Jade - Topic One: The...

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