310 international trade Flashcards
(12 cards)
1
Q
what is international trade
A
- consists if the buying and selling of imports and exports (goods and services) between countries
2
Q
reasons for international trade
A
- growth
- increase sales and profit
- spreads risk
-spreading technical knowledge
3
Q
(+) of international trade
A
- creates more jobs
- offers customers more choice
- offers busisnes reduced supplier power
- offers suppliers more market to sell to
- increases revenue for the government
- allows for greater innovation
- improves quality
- reduces price
4
Q
(-) international trade
A
- it can price out small domestic products (drive out)
- increases competition
- leads to a loss of domestic jobs
- it can lead to exploitation of stakeholders such as employees
- drive out domestic culture
- lead to innovation happening too quickly increasing skills gap
- it can lead to a loss of revenue for government as international busisnes take their profit home
5
Q
factors creating an increase in international trade
A
- customer expectations
- technological changes
- falling price of transporting goods- containerisation
- cross boarder deregulation- EU/trade agreements
- increasing development and specialisation in former developing counties eg. India, china
- globalisation
- falling mackey research costs and complexity
6
Q
what is free trade
A
- international trade conducted without the existence of barriers to trade, such as quotas and tariffs
7
Q
what is a free trade area
A
- where there are no tariffs, taxes or quotas on goods or services from one county entering another
- these members of free trade area do not have a common external tariff tariff on goods entering the area
- can negotiate tariffs
8
Q
what is the single market
A
- is like a free trade area in that there are no quotas, tariffs or taxes on trade but also where there is free movement of goods, services and capital
- there is a common external tariff on goods entering the single market
- all have the same laws are tariffs
9
Q
what is protectionism
A
- is essentially the opposite of the free market
- is an economic policy of restraining trade between counties though the imposition of barriers to trade, such as tariffs or quotas
10
Q
methods of protectionism
A
- tariffs - taxes on imports or exports
- quotas- government- imposed limit on exports/imports
- embargos- complete ban on trade with a particular country
- non- competitive purchasing from the government- only hiring and purchasing from own country firms
11
Q
evaluate benefits of free market
A
( on yellow book)
12
Q
evaluate benefits of protectionism
A
( on yellow book)
