24 International trade

Question 1

What are visible exports

Answer 1

Products that ireland sells to foreign countries
Eg:Irish farmers sell beef to french shops

Question 2

What are Invisible Exports

Answer 2

Irish business sell services to foreign countries
Eg:Irish band tours australia
British family stay in hotel in dublin

Question 3

What are visible imports

Answer 3

Products irish ppl buy from foreign countries
Eg: Brown Thomas buys Ralph Lauren from USA
Dunnes buys fruit from south africa

Question 4

What are invisible imports

Answer 4

Services irish ppl buy from foreign countries
Eg:Irish fam stays in hotel in paris
British singer tours ireland

Question 5

What is the word equation for Balance Of Trade

Answer 5

Difference between the value of all the products ireland exports and imports

Question 6

What is the word equation for Balance Of Payments

Answer 6

difference between the value of all the products AND services that Ireland exports and imports

Question 7

Formula for balance of trade

Answer 7

Visible Exports — Visible Imports
(VE minus VI)

Question 8

Whats the formula for Balance of payments

Answer 8

Total exports — Total imports
(TE minus TI)

Question 9

List four reasons countries import

Answer 9

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)

Question 10

List 3 reasons why countries export

Answer 10

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)

Question 11

What is an open economy

Answer 11

An economy that imports and exports freely with the rest of the world

Question 12

What are irelands buggest exports

Answer 12

Pharmaceuticals chemicals and computers

Question 13

Why does ireland depend on international trade? (3 points)

Answer 13

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

Question 14

5 points of significance of international trade to the irish economy

Answer 14

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

Question 15

What does free trade mean

Answer 15

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)

Question 16

Define protectionism

Answer 16

countries use barriers to trade to try restrict foreign imports
and/or
increase their own exports to help their own business do well

Question 17

List four barriers to trade

Answer 17

1.Tariff
2.Quota
3.Embargo
4.Subsidy

Question 18

What is a tariff (barriers to trade)

Answer 18

Tax that a country adds to the price of foreign imports so theyre dearer and wont sell well

Question 19

Whats a quota (barriers to trade)

Answer 19

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

Question 20

Whats an embargo (barriers to trade)

Answer 20

Country outs a complete ban on all foreign imports (or imports from a specific country)

For many years Usa had embargo w cuba

Question 21

What is a subsidy

Answer 21

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