4.1 International economics

Question 1

4.1.1 A)
Define globalisation

Answer 1

The process of greater intergration & interconnectedness between countries

Question 2

4.1.1 A)
What are the char of globalisation

Answer 2

Growth of international trade
trade liberalisation
enchance mobility of capital & labour
^outsoucring
v transport costs
^ size & influence of mutinational corporations

Question 3

4.1.1 B)
What are factors contributing to globalistation

Answer 3

Transport
internet
trade agreement
Rediced tariffs & protectism
expansion of global trading block
Improved technology
More globalised financial systems
greater labour mobility
improvements in transport
growth in mnc
openess of former closed economic

Question 4

4.1.1 B)
What are factors contributing to globalistation
Transport

Answer 4

Quicker to move goods

Question 5

4.1.1 B)
What are factors contributing to globalistation
internet

Answer 5

Quicker to move infomation

Question 6

4.1.1 B)
What are factors contributing to globalistation
trade agreement

Answer 6

world trade org assists revoal of trade barriers > ^ trade

Question 7

4.1.1 B)
What are factors contributing to globalistation
Rediced tariffs & protectism

Answer 7

Reduce tax on imports and allow trade

Question 8

4.1.1 B)
What are factors contributing to globalistation
expansion of global trading block

Answer 8

reduced national barriers promoites trade

Question 9

4.1.1 B)
What are factors contributing to globalistation
Improved technology

Answer 9

Revolutionalised comminication lowered labour costs allow for access to new market

Question 10

4.1.1 B)
What are factors contributing to globalistation
More globalised financial systems

Answer 10

relaxation on rules & regulation capital can move freely or at low cost quicker

Question 11

4.1.1 B)
What are factors contributing to globalistation
greater labour mobility

Answer 11

worker willing to move across national border

Question 12

4.1.1 B)
What are factors contributing to globalistation
improvement in transport

Answer 12

Movement of people goods & servies easter & cheaper

Question 13

4.1.1 B)
What are factors contributing to globalistation
growth on mnc

Answer 13

Org takes adv of trade barriers labour mobility cheap transport to grow rapidly and enter new markets

Question 14

4.1.1 B)
What are factors contributing to globalistation
openess of former closed economic

Answer 14

Large and rapid developing countries such as india and china inc intergrated into global economy

Question 15

4.1.1 C)
Pos impacts of globalisation

Answer 15

Standards of living inc in lic
cheaper goods
consmer choice
Improved allocation of rec
mulitpier effect

Question 16

4.1.1 C)
Neg impacts of globalisation

Answer 16

Low wages in LIC
v working conditions to v costs
money stays in rich countries
mnc move around to find cheaper labour
pollute local area
put local busniesses out of busniess

Question 17

4.1.3 A)
How does geographical location effect pattern of trade

Answer 17

further means more expensive

Question 18

4.1.3 A)
How does commodities effect pattern of trade

Answer 18

Certain goods from diff places in the world

Question 19

4.1.3 A)
How does trade blocks effect pattern of trade

Answer 19

Makes trading more accessable

Question 20

4.1.3 A)
How does emerging economies effect pattern of trade

Answer 20

^pop, ^ ss of labour, v wage, v cost of production

Question 21

4.1.3 A)
How does deindustrilisation effect pattern of trade

Answer 21

Finacial and tertiary markerting growing.

Question 22

4.1.3 A)
What is absolute advantage

Answer 22

a coutry produce a good at a lower direct costs

Question 23

4.1.3 A)
What is comparative advantage

Answer 23

country can produce a good servies at lower opp cost when country more efficent

Question 24

4.1.3 A)
How does comparative advantage incluence POT

Answer 24

Developing country produce eacher
improvment in production and v inflation pressure
v manufacturing in devlopoing country v neg externalites

Question 25

4.1.3 A)
How does the impact of NEE effect POT

Answer 25

^ trade made NEE participatete more eff in global trade
NEE find it hard to access large market
Growth in NEE led to rise in primary recources

Question 26

4.1.3 A)
How does growth of trade effect POT

Answer 26

Trading block grow
allow free trade, removes barriers
agreements

Question 27

4.1.3 A)
How does realtive exchange rate effect POT

Answer 27

Appreciaton in exhange rate will lead to a fall in exporet and price of goods aborad will rise

dependant on PED of product

Question 28

4.1.4 A)
What does terms of trade measure

Answer 28

measures the rate of exhange of one product for another when two countries trade

it tells us the qty of exports that need to be sold in order to purchase given level of import

Question 29

4.1.4 A)
What is favourable / unfavourable

Answer 29

movement in the terms of trade is favourable if terms of trade increaee as country can but more imports with same level if exports

visa versa

Question 30

4.1.4 A)
calc of terms of trade

Answer 30

(avg export price index / avg import price index ) 100

Question 31

4.1.4 B)
factors influcening a countries term of trade

Answer 31

^ exports prices or v import prices = improvment in terms of trade
versa visa is deterioation in terms of trade

improvments in productivity
changing income
exhange rates

Question 32

4.1.4 B)
How does improvements in productivy influence terms of trade

Answer 32

In the LR improvements in productivity compared to trading partners, v terms of trade due to export prices falling relative to import prices due to new tech and more eff labour

Question 33

4.1.4 B)
How does relative exhange rate influence terms of trade

Answer 33

In the SR exhange rates, inflation rates and changes in dd/ss of imports or exports all effect terms of trade

Question 33

4.1.4 B)
How does changing income influence terms of trade

Answer 33

In the LR dd ^ = ^ terms of trade. LR prices of pirmary goods decline in proportion to manufactured goods those who depend on primary goods see v in terms or trade

Question 34

4.1.4 C)
How does terms of trade effect economy

Answer 34

If ped of im/exports inelastic a favourable movement in terms of trade would improve current account balance of payment. Elastic would worsen

improvement in terms of trade v GDP and ^ unemployment. ^ export prices = v exports. v import prices = ^ imports. both reduce production in country. However in longterm v terms of trade suggests decline in std of living

improve due to ^ dd for exports benfits countryu.

if deterioation duie to improvement in competion also benfiits

import & export revenue more important than price.