IB Economics 4. the Global Economy Key Definitions

The ability to produce the same quantity of a good or service using fewer resources per unit of time.

Bureaucratic rules and regulations imposed by governments to restrict imports and protect domestic industries.

Appreciation is the increase in the value of a currency.

A statement or record of a country's economic transactions with the all other countries over a specific time period (often a year).

Occurs on an account when total debits exceed total credits, so the country pays out more on its international transactions than it receives.

Occurs on an account when total credits exceed total debits, so the country receives more from its international transactions than it pays out.

Human-made factors of production used to produce goods and services.

The capital account is the sum of the balance of capital transfers and transactions in non-produced, non financial assets.

The large-scale and rapid movement of financial assets or capital from a country to foreign markets, often due to economic instability, political uncertainty, or fear of currency depreciation.

The institution responsible for a country's monetary system. It issues currency, regulates and supervises commercial banks, acts as banker to the government, and conducts monetary policy.

A form of trading bloc that builds on a customs union by allowing the free movement of goods, services, and factors of production (labour, capital, etc.) among member countries.

A country having lower opportunity costs in the production of a good compared to another country.

A single measure that combines multiple individual indicators into one index to provide an overall assessment.

In the balance of payments, an entry recording money flowing into the economy from abroad, such as payment for exports or an inflow of foreign investment.

The current account is the sum of the balance of trade in goods and services, income and current transfers.

A type of trading bloc that fits all the criteria of being an FTA but also adopts a common policy towards non-member countries.

Cyclical unemployment occurs during economic downturns when demand for goods and services falls, leading to job losses.

In the balance of payments, an entry recording money flowing out of the economy to abroad, such as payment for imports or investment sent overseas.

Depreciation is the decrease in the value of a currency.

A deliberate decrease in the value of a currency by the government or central bank within a fixed exchange rate system. It is the fixed-rate counterpart of a depreciation, which happens through the market under a float.

The process of expanding the range of products, services, or markets to reduce risk and enhance economic stability.

The sale of goods and services in international markets at a price that is lower than the cost of production

Structural challenges that prevent countries from achieving sustainable economic growth and development.

The process of increasing real per capita income while improving living standards and reducing poverty within an economy as whole.