| A | B |
|---|
| globalisation | an expansion of world trade in goods and services leading to greater international interdependence |
| factors contributing to globalisation | improvements in transportation and information technology and deregulation |
| economies of scale | term that describes the benefits enjoyed by firms when an increase in the level of output leads to the reduction in the average unit cost of production |
| benefits of globalisation | access to cheap imported goods, reduces inflation, greater consumer choice |
| disadvantages of globalisation | caused divisions in labour market with lower wages and working conditions |
| imports | the goods/ services provided by overseas and bought from AU residents |
| exports | the goods and services that the AU sells to the rest of the world |
| inflow of capital funds (money) | with exported goods there will be a flow of money for AU in which direction |
| outflow of capital funds (money | with imported goods there will be a flow of money for AU in which direction |
| protectionism | where an action is taken that reduces international trade |
| methods of protectionism | tariffs, quotas, embargo and regulations |
| tariff | a tax placed on imports to increase the price and reduce the quantity demanded |
| quota | a physical limit on the number of goods imported into a country |
| embargo | term to describe a total ban on trade |
| international monetary fund (IMF) | global organisation that facilitates international trade, promotes high employment and sustainable economic growth, and reduce poverty around the world. |
| world trade organisation | global organisation aiming to promote multinational trade by removing obstacles and create a level playing field for all countries. |
| world bank | an international financial institution that provides loans and grants to the governments of low- and middle-income countries for capital project |
| disadvantage of protectionism | only temporary solution for problem, higher product prices, products may decline in quality |
| advantage of protectionism | protects local firms from foreign competition beneficial to the development of new products, local jobs created, additional tax revenues from import tariffs |
| international monetary fund | this global organisation also serves to stabilize the international monetary system and acts as a monitor of the world's currencies. |
