12. International Trade Flashcards
What are the 4 types of trade agreement?
Free trade area
Customs union
Common/single market
Economic union
What is a free trade area?
Where there is no restriction in the movement of goods and services between countries, although individual member countries can impose their own restrictions on non-member countries.
What is a customs union?
Where a free trade area is extended into a customs union between all member countries of the union, in addition there are common external tariffs applying to imports from non-member countries into any part of the union.
What are common markets and how do they become single markets?
A common market is a a customs union that has free markets in the factors of production and a move to standardise market regulations. Eventually a common market will become a single market with no restriction of movement or regulatory differences.
What is an economic union?
When a common/single market evolves into an economic union with a common central bank, a common interest rate and a single currency.
What is the role of the IMF?
To support the stability of the international monetary system by providing support to countries with balance of payment problems.
What is the world bank?
The word bank lends to credit worthy governments of developing nations to finance projects and policies that will stimulate economic development and eliminate poverty.
What is PESTEL
Political Economic Social Technological Environmental Legal
It is a framework for analysing opportunities and threats in the external environment of a business.
