Globalisation (OCR A-Level Economics): Flashcards

Producing with less resources & at lower cost

Producing at a lower opportunity cost

Ratio of export prices to import prices

$\frac{\text{Index of export prices}}{\text{Index of import prices}} \times 100$

Increased interconnectivity via trade, migration, finance, tech

PED exports + PED imports $> 1$ for current account improvement

Current account worsens first, then improves after depreciation

Access to larger markets & economies of scale

Reduced costs & barriers to international trade

More output with same inputs = lower costs

Makes exports cheaper & imports more expensive

Opportunity cost, not overall efficiency

Buy more imports for given quantity of exports

Export more to purchase same amount of imports

Sum of elasticities must be $> 1$