Theme 4 - 1.2 - International trade

Question 1

What is specialisation ?

Answer 1

The process of focusing on a specific skill or task.

Question 2

What are the advantages to specialisation ?

Answer 2

• Increased productivity and reduced unit costs.
• increased productivity leads to GDP growth.

Question 3

What is FDI?

Answer 3

Foreign direct investment.

Question 4

What is globalisation ?

Answer 4

The world becoming more interconnected through trade.

Question 5

What is trade liberalisation ?

Answer 5

The process of making international trade easier by relaxing trade barriers and tariffs.

Question 6

What are the benefits to trade liberalisation ?

Answer 6

• consumers benefit from cheaper prices.
• increased competition.

Question 7

What are the disadvantages of trade liberalisation ?

Answer 7

• structural unemployment.
• infant industries face extreme competition and go out of business.

Question 8

What are the disadvantages to specialisation ?

Answer 8

• A country may become overdependent on another country.
• Countries may suffer from diseconomies of scale as a result of the business getting too big.