24 International trade Flashcards
What are visible exports
Products that ireland sells to foreign countries
Eg:Irish farmers sell beef to french shops
What are Invisible Exports
Irish business sell services to foreign countries
Eg:Irish band tours australia
British family stay in hotel in dublin
What are visible imports
Products irish ppl buy from foreign countries
Eg: Brown Thomas buys Ralph Lauren from USA
Dunnes buys fruit from south africa
What are invisible imports
Services irish ppl buy from foreign countries
Eg:Irish fam stays in hotel in paris
British singer tours ireland
What is the word equation for Balance Of Trade
Difference between the value of all the products ireland exports and imports
What is the word equation for Balance Of Payments
difference between the value of all the products AND services that Ireland exports and imports
Formula for balance of trade
Visible Exports — Visible Imports
(VE minus VI)
Whats the formula for Balance of payments
Total exports — Total imports
(TE minus TI)
List four reasons countries import
1.Lack of natural resources
(Ireland lacks oil so imports from saudi
arabia)
2.Unsuitable climate
(Ire imports bananas from brazil)
3.Lack of skills
(Ire imports german cars cuz they the
best)
4. Bigger choice for consumer
(We can still buy foreign spuds in
ireland even though we have enough)
List 3 reasons why countries export
1.Survival
(Home market may be too small to
make a profit)
2.Increase Sales + Profits
(LilyOB chocolates, 80% of their sales
come from exports)
3.Diversification
(Spread the risk, if one economy goes
through a bad patch, sales in other
countries shud keep the company
profitable)
What is an open economy
An economy that imports and exports freely with the rest of the world
What are irelands buggest exports
Pharmaceuticals chemicals and computers
Why does ireland depend on international trade? (3 points)
1.Ireland is a small open economy it buys and sells in huge amounts witj rest of world
2.We export 80% of everything produced in ireland
3.Irish exports account for majority of Irelands income
5 points of significance of international trade to the irish economy
1.Ire businesses can sell to billions of customers worldwide=more sales
2.Making more products to export gives economies of scale=lower costs
3.Exports receive foreign currency which we can spend on imports
4.More sales due to international trade = hire more employees = lower unemployment = lower tax
5.Ire businesses face lots of foreign competition so theyve to keep costs low and quality high=better irish businesses
What does free trade mean
Means that countries can buy and sell with other countries without any barriers or restrictions in the way
EU practice free trade
So do countries in NAFTA (Usa Canada Mexico)
Define protectionism
countries use barriers to trade to try restrict foreign imports
and/or
increase their own exports to help their own business do well
List four barriers to trade
1.Tariff
2.Quota
3.Embargo
4.Subsidy
What is a tariff (barriers to trade)
Tax that a country adds to the price of foreign imports so theyre dearer and wont sell well
Whats a quota (barriers to trade)
Country puts a limit on the amount of foreign imports it will allow
Once quota is reached, no more allowed and ppl must buy from indigenous businesses
Whats an embargo (barriers to trade)
Country outs a complete ban on all foreign imports (or imports from a specific country)
For many years Usa had embargo w cuba
What is a subsidy
Money that a government gives to its own indigenous businesses to allow them to sell their products or services more cheaply abroad to compete easier
