globalisation and the intl economy

Question 1

3 flows that contribute to globalisation?

Answer 1

trade flows
labour flows
capital flows

Question 2

define CA

Answer 2

CA: when a country has CA over another country in the production of a good, so it can produce the good at a lower app cost

Question 3

CA assumptions

Answer 3

1. only 2 countries, producing 2 goods
2. each county initially uses half its resources for prod of each good
3. resources are fully employed and perfectly mobile w/in each country
4. constant opp cost of production
5. no barriers to trade
6. no transport costs

Question 4

factors affecting globalisation?

Answer 4

1. growth of econ co-operation
2. advancements in tech (transport & telecommunications)
3. policy changes

**explain

Question 5

dd-side reasons for trade?

Answer 5

1. diff in T&P

2. stimulated EG and devt (for the country exporting)

Question 6

ss-side reasons for trade?

Answer 6

• theory of CA
  1. diff in resource endowment
  2. immobility of resources
  3. potential for greater IEOS