4.1

Question 1

International trade

Answer 1

Flow of goods and services between countries e.g. imports and exports

Question 2

Why may trade increase?

Answer 2

• Globalisation or change in transport and communication
• Trade liberalisation (No tariffs)
• Specialisation benefits of other countries (low costs)

Question 3

Advancing economies

Answer 3

• Most work in terrible sectors
• Educated high intensity levels
• Longer life expectancy
• Good infrastructure

Question 4

Emerging economies

Answer 4

Growth is rapid but there is a lot of risk
- Move away from primary sectors
- Rising levels of capital investment
- Collaborations with multi-nationals
- Attractive production and location to sell to

Question 5

GDP

Answer 5

Value of goods/services (output) produced in a country within a year

+Measured frequently/widely
+ Insight in countries economies
- Hidden markets e.g. black market
- Distribution of wealth
- Growth may not be sustained
- Ignores living conditions

Question 6

Import quota

Answer 6

Limit on the total quantity of imports that can be brought into a country in a given time period

Question 7

Trading barriers

Answer 7

• Government legislation
• Tariffs
• Domestic subsidies

Question 8

Factors contributing to increased globalisation

Answer 8

• Reduction of international trade barriers
• Political change
• Reduced cost of transport and communication
• Increased investment flows (FDI)
• Migration (within and between economies)
• Growth of the global labour force
• Structural change

Question 9

Foreign direct investment (FDI)

Answer 9

When one country invests in another meaning more job opportunities and less unemployment

Question 10

Trading blocs

Answer 10

Group of countries that work together to provide special deals for trading. This promotes trade between specific countries within the bloc

Question 11

EU and single market

Answer 11

By removing technical, legal and bureaucratic barriers, the EU also allows citizens to trade and do business freely

Question 12

ASEAN

Answer 12

Intergovernmental organization of ten Southeast Asian countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam

Question 13

NAFTA

Answer 13

North American Free Trade Agreement (NAFTA) is an agreement that brought together three North American countries, i.e., the United States, Canada, and Mexico

Question 14

Trading blocs pros and cons

Answer 14

+ Lower costs
+ Freely trade with countries
+ Higher growth
+ Economies of scale
- Increased competition
- Retaliation from non-member countries
- Economic dependence
- Loss of sovereignty

Question 15

Literacy rate

Answer 15

The percentage of adults (over 15) that can read and write

Question 16

Specialisation

Answer 16

A production strategy where a business focuses on a limited scope of products or services. This results in greater efficiency, allowing for goods and services to be produced at a lower cost per unit.

Question 17

Globalisation

Answer 17

The growing integration of the world’s economies

Question 18

World trade organisation

Answer 18

An international organisation that promotes free trade by persuading countries to abolish tariffs and other barriers. It policies free trade agreements, settles trade disputes between governments and organises trade negotiations.

Question 19

Administrative barriers

Answer 19

Rules and regulations (such as trading standards and strict specifications) that make it difficult for importers to penetrate an overseas market

Question 20

Infant industries

Answer 20

New industries that have yet to establish themselves

Question 21

Common market

Answer 21

A market where goods, labour and capital can move freely across the member states; tariffs are generally removed and non-tariff barriers eliminated, or at least reduced

Question 22

Free trade area (FTA)

Answer 22

A region where member states remove all trade barriers between themselves, but each member state nevertheless keeps different barriers against non-member states

Question 23

Regional trade agreement (RTA)

Answer 23

Agreement made between two or more countries within a geographical region, which is designed to facilitate trade by bringing down barriers

Question 24

Single market

Answer 24

A market where almost all trade barriers between members have been removed and common laws or policies aim to make the movement of goods and services, labour and capital between countries as easy as the movement within each country