GLOBALISATION NOTES

Question	Answer
THEORY OF COMPARATIVE ADVANTAGE	Definition: Theory of CA states that countries should specialise in producing the gds & svs that they have lower opportunity cost in Affected by opportunity cost & govt policy
How governments can improve export competitiveness	1) Improving factor quality & quantity 2) Devaluation 3) Reduce domestic inflation 4) Export subsidies 5) Non-price factors
OPPORTUNITY COST	def. cost of next best alternative foregone, using factor quality & quantity Factor quantity: depletion of natural resources e.g Brunei Factor quality: FDIs & tech, Education
Singapore's Pattern of Trade	1) Trade pattern Export Destination: HK, China, M'sia Import destination: China, USA, SK 2) Volume & Composition High-tech, skills-intensive goods such as oil refinery, biomedical, financial
Factors affecting Pattern of Trade	1) Comparative Advantage - when composition = opp cost 2) Demand-side reason - composition = tastes & pref 3) Historical/Geographical reasons
Costs of increased flows of LABOUR	Higher competition for domestic industries --> Need for constant restructuring & innovation --> sectors that cannot compete must relocate or outsource to lower cost --> structural unemployment

Resource summary

	Created by Timothy Wan about 7 years ago