4.1.5 Trade blocs

Question 1

What is a trade bloc

Answer 1

A group of nations agreeing on the same terms of trade as eachother

Question 2

Features of an economic and monetary union

Answer 2

Common external tariff, no internal trade barriers, free movement of goods, labour and capital, use of a common currency

Question 3

Features of a common or single market

Answer 3

Common external tariff, no internal trade barriers, free movment of goods, labour and capital

Question 4

Features of a customs union

Answer 4

Common external tariff, no internal trade barriers

Question 5

Features of a free trade area

Answer 5

No internal trade barriers

Question 6

Features of a preferential trade area

Answer 6

Lower tariffs on certain products

Question 7

Name 3 trade blocs

Answer 7

Eu, ASEAN, NAFTA

Question 8

Name 3 positive impacts of a trade bloc on a business

Answer 8

The market for a firms good should increase.
As the volume of trade increases, business’ can utilise economies of scale.
As trade increases, it may result in greater competition, resulting greater efficiency in the market

Question 9

Name 3 negative impacts of a trade bloc on a businss

Answer 9

Inefficient producers may be protected from competition, therefore harming efficiency
Global tensions may increase if the benefits accrued are high
Smaller organisations may not benefit from the increased competition, as they will Lilley be charging higher prices as they have not utilised economies of scale

Question 10

What is a regional trade agreement

Answer 10

Agreement made between 2 or more countries, within a geographical region designed to bring down barriers

Question 11

What are Rules of origin

Answer 11

A system allocating certificates whereby a defined amount of product or service must be certified as being created within that origin