4.1.2 international trade and business growth

Question 1

what is international trade?

Answer 1

the exchange of products between countries

Question 2

name 3 benefits of international trade

Answer 2

• export revenues increase
• low prices for consumers, markets are more competitive
• increases productivity
• knowledge and skill across borders
• economies of scale
• better use of scarce resources

Question 3

name 3 potential drawbacks of international trade

Answer 3

• transport costs
• negative externalities from production
• structural unemployment
• rising inequality
• pressure on wages and working conditions
  risk of global external shocks

Question 4

define exports

Answer 4

exports arise when goods need to be sent out of a country to another

Question 5

define imports

Answer 5

imports arise when a country receives exported products