What is the formula for calculating trade balance?
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Export - Import.
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What is the formula for calculating trade balance?
Export - Import.
What is the focus of Week 01 in the MOD007191 course?
Introduction to globalization.
What does Comparative Advantage Theory focus on?
Relative costs of production.
What does a trade surplus indicate?
A positive trade balance where exports exceed imports.
What type of workshop is conducted in Week 01?
Tutor-led workshop.
What indicates that a country has a comparative advantage?
If its opportunity cost in producing a certain good is lower.
What is Incremental Internationalisation?
A gradual approach to expanding into international markets.
What does a trade deficit indicate?
A negative trade balance where imports exceed exports.
What broader context is discussed in relation to globalization in this course?
Global Business Environment and International Strategy.
What are the benefits of globalization at the organizational level?
Increased market access, enhanced competitiveness, and opportunities for innovation.
What is opportunity cost in the context of Comparative Advantage?
The cost of forgoing the next best alternative when making a decision.
What characterizes Fast / Instant Internationalisation?
Rapidly entering international markets with little delay.
What is one reason for trade intervention?
To protect national interests, such as defense.
What is the primary focus of mercantilism?
To maximize exports and minimize imports.
What is the primary function of businesses in the context of export and import?
To facilitate trade between countries by selling goods and services across borders.
How does globalization benefit nations?
By promoting economic growth, attracting foreign investment, and improving trade relations.
What does a Global focus in export strategies entail?
Targeting international markets from the outset rather than focusing on domestic first.
What is protectionism?
A policy to protect national industries from foreign competition.
What is an export?
A good or service sold by a country to another country.
Why do countries engage in imports?
To obtain goods that are not available locally.
What are the social or individual benefits of globalization?
Access to diverse cultures, improved quality of life, and enhanced educational opportunities.
Why might a government intervene in trade?
To save jobs within the country.
What is one reason for importing goods?
Specialization of labor.
What is an import?
A good or service purchased by a country from another country.
What is the main premise of Absolute Advantage Theory?
All countries can gain by engaging in free trade, making it a positive sum game.
What does 'dumping' refer to in trade?
Selling goods in a foreign market at a price lower than their domestic market value.
What role do Country A and Country B play in international trade?
They engage in exporting and importing goods and services with each other.
What does local unavailability refer to in the context of imports?
The lack of certain goods or resources within a country.
What are examples of merchandise?
Manufactured goods, mining output, and agricultural products.
What economic theory dominated in the 16th and 17th centuries?
Mercantilism.
What should countries specialize in according to Absolute Advantage Theory?
Producing goods in which they are most efficient, or have an absolute advantage.
What are political motives in trade intervention?
Reasons related to political goals or relationships, rather than economic ones.
How does competition influence imports?
It encourages countries to import goods that are produced more efficiently elsewhere.
What is a potential threat posed by globalization?
Threats to national control or even sovereignty.
What type of goods includes items produced through industrial processes?
Manufactured goods.
What is globalization?
The creation of linkages or interconnections between nations by reducing or removing barriers, stimulating exchange in goods, services, money, and people.
What is the effect of specialization on world output?
World output increases and surpluses can be traded.
According to mercantilism, what does a nation's wealth depend on?
Accumulation of precious metals, specifically gold and silver.
What has been a significant trend in trade over the last 30 years?
Lowering of barriers.
What is a limitation of the comparative advantage theory regarding intra-industry trade?
It does not explain intra-industry trade.
How can economic growth related to globalization negatively impact the environment?
It can cause environmental stress.
What does mining output refer to?
Products extracted from the earth, such as minerals and metals.
What does the removal of barriers in globalization refer to?
Liberalization.
What should not restrict international trade according to Absolute Advantage Theory?
Tariffs and quotas.
What has contributed to the increase in trade efficiency in the last 30 years?
Reduction of transportation costs.
What should countries do according to mercantilist principles?
Export more than they import.
What aspect of economies does the comparative advantage theory fail to account for?
Market size.
What is a consequence of hyper-growth in the context of globalization?
It can lead to the depletion of non-renewable natural resources.
What are agricultural products?
Goods produced from farming, including crops and livestock.
What is meant by 'interdependent relationships' in the context of globalization?
Relationships among people from different parts of a world divided into nations.
What is the goal of mercantilism regarding trade balance?
Maintain a trade surplus and avoid a trade deficit.
How have communication costs affected trade in the last 30 years?
Reduction of communication costs has facilitated trade.
What type of competitiveness is not considered in the comparative advantage theory?
Non-price competitiveness.
What type of inequality can arise from globalization?
Possible income inequality at both organizational and individual levels.
What is regionalisation?
The process of creating a common market and transport/movement corridors based on mutual interests.
What are some key elements of globalization according to Hill and others?
Shrinking space, shrinking time, disappearing borders, and creation of a global market.
What key problem is associated with mercantilism?
It is considered a zero-sum game.
What can negate the benefits of comparative advantage in trade?
Transport costs may outweigh any comparative advantage.
What is vertical specialization in the context of trade?
A trend where production processes are divided across different countries.
Which countries are mentioned as examples in the context of globalization's costs?
Ethiopia, Kenya, Sri Lanka, Indonesia, China, UK, Bangladesh.
What is a common market?
A group of countries that have agreed to reduce or eliminate trade barriers among themselves.
How does globalization influence world economies?
By eliminating barriers to the international movement of goods, services, capital, technology, and people.
What economic theory emphasizes the importance of accumulating wealth through trade?
Mercantilism.
What action can governments take that limits the effectiveness of comparative advantage?
Governments may restrict trade.
What is a common government action that acts as a barrier to globalization?
Government regulation.
What are transport/movement corridors?
Designated routes that facilitate the movement of goods and people between regions.
What is the principle of Absolute Advantage?
The ability of a country to produce more of a good with the same resources than another country.
How do tariffs and subsidies impact globalization?
They create financial barriers to trade.
What type of advantage does the comparative advantage theory measure?
Static advantage over dynamic advantage.
What characterizes a formal pact in regionalisation?
An agreement based on mutual interests among participating countries.
What does Comparative Advantage refer to?
The ability to produce a good at a lower opportunity cost than another producer.
What type of controls can restrict the flow of capital in globalization?
Controls on Capital.
What year was the Arab League formally constituted?
What are some political trends affecting the contemporary world?
Political populism, conservatism, and isolationism.
What is localisation?
The focus on local segments and markets, often due to a lack of capacity to expand.
What does the Heckscher-Ohlin Theory suggest about trade?
Countries should export goods that use their abundant resources and import goods that require resources in which they are scarce.
What type of controls can limit the movement of people across borders?
Border/Immigration Controls.
How many original member states did the Arab League have?
Six member states.
What economic issues are associated with political populism in Europe?
Weak economic growth, low productivity, job insecurity, and unstable markets.
What are common reasons for localisation?
Lack of capacity to expand and lack of aspiration or vision.
What is a weakness of the Heckscher-Ohlin Theory?
It considers all value addition factors as equal.
What role do technical standards play in globalization?
They can create barriers if not aligned internationally.
What is the current number of members in the Arab League?
22 members.
What is the refugee crisis a consequence of?
A more interconnected world.
What does the Leontief Paradox highlight?
It considers the relative importance of value addition factors in trade.
Why is the protection of intellectual property rights a barrier to globalization?
It can limit access to markets and technologies.
When was the Commonwealth formally constituted?
How does the refugee crisis relate to globalization?
It is both a consequence of globalization and a cause of revolt against it.
What does Raymond Vernon's Product Life Cycle (PLC) theory explain?
The stages a product goes through from introduction to decline and how it affects trade patterns.
How does lack of familiarity with a target location affect globalization?
It can hinder market entry and expansion.
What are some geopolitical challenges in the contemporary world?
Geopolitical conflicts and changing political climate.
What impact does a wrong or misguided perception have on globalization?
It can lead to poor business decisions and missed opportunities.
How many members does the Commonwealth currently have?
52 members.
What is an economic driver of globalization?
Growth of international trade and increase in capital, goods, and information flows.
What is a significant challenge posed by climate change?
Creating a balance of good lives with sustainable limits.
What organizations were founded in the 1950s related to regionalization?
The ECSC (European Coal and Steel Community) and EEC (European Economic Community).
How do emerging markets relate to globalization?
They contribute to growth and risk management.
What does global competition represent in the contemporary world?
A challenge to economic stability and growth.
What political factors drive globalization?
Changing political situations, government policies, and emergence of new forms of governance.
What year was the African Union formally constituted?
What social aspect is a driver of globalization?
The rise of a global culture and consumer pressures.
What did the African Union replace?
The Organisation of African Unity.
How many members does the African Union currently have?
55 members.
How does media influence globalization?
Through its domination and influence on consumer behavior.
When was the Union of South American Nations formally constituted?
What international/legal factors contribute to globalization?
Expanded cross-national cooperation, trade regulations, tariffs, and subsidies.
What technical advancement is a driver of globalization?
The application of technology, particularly digital commerce.
How many members does the Union of South American Nations currently have?
12 members.
