Theme 4 - 1.3 International trade

Question 1

What is globalisation ?

Answer 1

The world becoming more interconnected as a result of increased trade and cultural exchange.

Question 2

What is trade liberalisation ?

Answer 2

Reducing barriers to trade such as tariffs.

Question 3

Why do governments impose barriers to trade ?

Answer 3

• Protect domestic firms from international competition.
• Tariffs provide poorer countries major source of income.

Question 4

What are the advantages to trade liberalisation ?

Answer 4

• Cheaper prices for consumers.
• Increased competition, productivity and investment.

Question 5

What are the disadvantages to trade liberalisation ?

Answer 5

• Country may become overdependent on other countries.
• increased trade can lead to pollution.
• Unemployment.

Question 6

What are the factors that have led to increased globalisation ?

Answer 6

• Political change.
• Reduced cost of transportation (larger cargo ships = economies of scale).
• Reduced cost of communication (internet).
• Increased FDI.
• Migration.
• Increased significance of MNCs
• Structural change ==> a change in a countries industry.