Free HSC Economics Flashcard Review

The process of increasing economic, social, political, and cultural integration between countries and regions, facilitated by advances in technology, transportation, and communication.

The movement of goods and services between countries. Measured by exports (goods/services sold abroad) and imports (goods/services purchased from abroad). Includes visible trade (physical goods) and invisible trade (services).

The movement of money and capital between countries, including foreign direct investment (FDI), portfolio investment, loans, remittances, and other capital transfers. Reflects investment decisions and financial integration.

A large business enterprise with ownership, control, and operations spanning multiple countries. TNCs engage in foreign direct investment, manage global supply chains, and operate across different jurisdictions.

World Trade Organization (WTO) — regulates international trade; International Monetary Fund (IMF) — provides financial assistance and macroeconomic coordination; World Bank — provides development financing and technical assistance.

An international organisation that regulates trade between nations, administers trade agreements, resolves trade disputes, and aims to achieve most-favoured-nation (MFN) status for member countries.

An international organisation that promotes international monetary cooperation, provides financial assistance to member countries, monitors economic policies, and manages the Special Drawing Right (SDR) currency.

Provides long-term development financing, technical assistance, and policy advice to developing countries to promote economic development, reduce poverty, and fund infrastructure projects.

The process of sustainable improvement in living standards, measured by increases in real income, human capital, infrastructure, and institutional development. Broader than economic growth (which measures GDP expansion).

GDP per capita, life expectancy, infant mortality rate, literacy rate, access to clean water. Also: Human Development Index (HDI), Gini coefficient, poverty rate, employment rate, healthcare provision.

Total Gross Domestic Product divided by population. Measures average income per person and is used to compare living standards between countries, though it does not account for income inequality or non-monetary factors.

A composite measure combining life expectancy, education (mean years of schooling and expected years of schooling), and gross national income per capita. Ranges from 0 to 1, with higher values indicating greater development.

The balance of payments account recording international transactions in goods, services, income (interest, profits, dividends), and transfers. Equals exports minus imports of goods and services plus net primary income and transfers.

The balance of payments account recording transactions involving non-financial assets (intellectual property, land, natural resources) and transfers of capital. Typically smaller than the financial account in practice.

The balance of payments account recording international flows of investment and financing, including foreign direct investment, portfolio investment (shares and bonds), loans, and other financial assets.

Current account + capital account + financial account = 0 (ignoring errors and omissions). A current account deficit must be offset by a financial account surplus (inflows of foreign investment).

The price of one currency expressed in terms of another currency. Determined by supply and demand in foreign exchange markets. Used to convert values between currencies and affects trade competitiveness.

Currency appreciation makes exports more expensive and imports cheaper, tending to worsen the trade balance (increase imports, decrease exports). The opposite occurs with currency depreciation.

An exchange rate determined entirely by supply and demand in the foreign exchange market, without government intervention. The rate fluctuates based on market forces (interest rates, inflation differentials, capital flows).

An exchange rate set and maintained by the central bank at a predetermined level against another currency or gold. Requires active government intervention and adequate foreign reserves to defend the peg.