3.1 Benefits of Trade Flashcards
1
Q
Why do countries trade?
A
Variety of Goods/services = choice
lower prices to competition
international relations
Increasing capacity (capital goods)
(x - m) trades result in growth.
2
Q
What will trading cause?
A
A decrease to the market price.
3
Q
What is the main issue with trading?
A
UK producers can’t compete with lower price.
4
Q
Q1 to Q to Q2 =
A
Imports
5
Q
Why would countries introduce trade barriers?
A
Because the loss for producers will backfire on the country.
6
Q
What are the three trade barriers?
A
Tariff, Quota and Domestic Subsidy.
