4.1 Importance Of Internation Trade Flashcards
1
Q
Exports definition
A
Goods and services produced domestically which are sold abroad
2
Q
Import definition
A
Goods and services brought from abroad
3
Q
Free trade agreement definition
A
Free trade, movement of goods and services, between member countries without restriction
4
Q
European Union definition
A
An economic and political group of countries in Europe that have free trade with each other, in addition to other internal freedoms
5
Q
Benefits and of international trade (consumers)
A
- lower prices of products, because of increased competition and access to cheaper markets
- higher standard of living, if more products are consumed due to trade
- greater choice, increases availability of products
- better quality of goods and services
6
Q
Benefits of international trade(producers)
A
- increased consumer market, can allow firms to increase output, may benefit from economies of scale
- larger access for factor inputs, access to raw materials which are not produces domestically
- more competition, may cause firms to produce more efficiently
7
Q
Why do countries trade ?
A
- different countries have different allocations of resources I.e land, labour, capital and enterprise
- these resources are relatively fixed over a short period of time
- meaning that through trade and specialisation, increases the productive potential of each individual country
