4.1.3 - Pattern Of Trade

Question 1

What Are The Factors Influencing The Pattern Of Trade Between Countries?
(7 Points)

Answer 1

~ Comparative advantage, export and import where countries have a large comparative advantage.

~ Trading blocs, so trade more with countries within the bloc, due to free trade.

~ Protectionist barriers, don’t trade with countries that have barriers on your goods.

~ Transport costs, trade with countries who are quite close, to minimise costs.

~ Non-price factors, some countries may have higher quality e.t.c.

~ Exchange rates, spiced or wpidec.

~ Inflation rates.