A selection of key terms and acronyms that students may find useful when studying the economics of the EU
1. Anti-trust: Competition rules on agreements and business practices which restrict competition and on abuse of dominant positions
2. ASEAN: An alliance of ten nations who have agreed to set up a free trade area – Association of South-East Asian Nations (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam)
3. Candidate countries: Countries that have applied to join the EU single market. Croatia, the Former Yugoslav Republic of Macedonia and Turkey have the status of candidate countries
4. Convergence criteria: A set of economic indicators which must be met by each Member State before it can adopt the euro. These include convergence in inflation, interest rates and fiscal deficits
5. Copenhagen Criteria - rules that define whether a country is eligible to join the European Union
6. Deepening: Moving towards closer levels of economic integration e.g. moving from a single market to a single currency
7. Economic shocks – unexpected external events affecting a domestic economy or industry
8. ETS – Emissions Trading Scheme
9. European Central Bank: The European Central Bank is responsible for the euro and European monetary policy
10. FDI – foreign direct investment
11. FSGP – Fiscal Stability and Growth Pact – an agreement between member nations in the Euro Zone to limit the size of their budget deficits in normal times
12. IMF – International Monetary Fund
13. Integration – increasingly linked and interdependent economic relationships between countries ranging from preferential trade agreements to full currency and economic union
14. Intra-industry trade – the exchange of goods and services (products) made by the same industry i.e. Honda exporting car component parts made in the UK to another Honda factory located in Eastern Europe
15. NAFTA – a three country free trade area comprising the USA, Canada and Mexico
16. Policy rate – the official monetary policy interest rate e.g. set by the ECB or Bank of England
17. Single Market: The single market guarantees the free movement of goods, people, services and capital.
18. Trade creation – where production shifts from higher cost to lower cost suppliers in countries forming a trade partnership (welfare enhancing)
19. Trade diversion – where production shifts from low-cost suppliers outside a trade bloc to higher-cost businesses inside a trade bloc (this reduces consumer welfare because it leads to higher prices)
20. WTO – World Trade Organisation
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