Key Terms to Revise

Closed economy: Economy operating without imports and exports

Comparative advantage: Relative cost advantage that one country or producer has over another

Competitiveness: Sustained ability to sell goods and services profitably at competitive prices in a foreign country

Containerisation: System of freight sea shipping that has reduced transport costs across the globe

Customs union: Group of countries that abolish tariffs and quotas to encourage free trade & adopt a common external tariff from non-members countries

De-globalisation: Diminishing interdependence and integration between economies

Dumping: When a producer exports at a price which is below below average costs of production

Emerging markets: Term used to describe the financial markets of fast-growing developing countries.

FDI: Acquisition of a controlling interest in operations abroad by businesses resident in the home economy.

Globalisation: Process in which countries have become increasingly integrated and inter-dependent

Intra-regional trade: Exchange of virtually identical products between countries within the same region.

Mercantilism: Notion applied to countries accumulating huge trade surpluses and focusing on export-led growth.

Single market: Deep integration between nations involving free trade in goods and services and free movement of labour and capital.

Specialisation: When individuals, regions or countries concentrate on making one product to create a surplus to trade.

Trade liberalisation: Reductions in tariff and non-tariff import barriers between nations

Trading bloc: Group of countries co-operating to liberalise trade

Transnational Corporation: Businesses basing manufacturing, assembly, research and retail operations in a number of countries

World Trade Organisation: Polices free trade agreements and decides on trade disputes between countries