Economics Unit 4: The Global Economy
1. Globalisation
Definition: The increasing integration and interdependence of economies.
Drivers: Technology, trade liberalization, multinational corporations (MNCs), global financial markets.
Impacts: Economic growth, inequality, environmental degradation, cultural exchange.
2. International Trade
Comparative and absolute advantage.
Benefits of trade: Efficiency, variety, access to goods/services.
Terms of trade.
Trade protection: Tariffs, quotas, subsidies, embargoes.
Free trade vs protectionism: Arguments for and against.
3. Balance of Payments (BOP)
Current account: Trade in goods/services, income, transfers.
Capital and financial account: Investment flows, reserves.
Causes of deficits/surpluses.
BOP adjustments and policies.
4. Exchange Rates
Floating vs fixed exchange rates.
Factors affecting exchange rates: Interest rates, inflation, speculation.
1. Globalisation
Definition: The increasing integration and interdependence of economies.
Drivers: Technology, trade liberalization, multinational corporations (MNCs), global financial markets.
Impacts: Economic growth, inequality, environmental degradation, cultural exchange.
2. International Trade
Comparative and absolute advantage.
Benefits of trade: Efficiency, variety, access to goods/services.
Terms of trade.
Trade protection: Tariffs, quotas, subsidies, embargoes.
Free trade vs protectionism: Arguments for and against.
3. Balance of Payments (BOP)
Current account: Trade in goods/services, income, transfers.
Capital and financial account: Investment flows, reserves.
Causes of deficits/surpluses.
BOP adjustments and policies.
4. Exchange Rates
Floating vs fixed exchange rates.
Factors affecting exchange rates: Interest rates, inflation, speculation.
