BS3- Internstional And Free Trade

Question 1

What is meant by a trading bloc

Answer 1

A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where barriers to trade are reduced or eliminated among the participating states.

Question 2

Identify three examples of trading blocks

Answer 2

Eu- European Union

Cis- commonwealth of independence states

Question 3

Outline two advantages of a business being part of a trading bloc

Answer 3

Gives a larger markets

Decreases monopoly power as competition increases

Question 4

Explain why being a part of a trading bloc can limit trade with countries outside of the trading bloc

Answer 4

It can be expensive due to the bloc putting tariffs up for countries that aren’t in so that it doesn’t benefit them

Question 5

Describe two other drawbacks of a business being a part of a trade bloc

Answer 5

Countries can often only be a part of one trading bloc which can limit them
Encourages international trade which is bad for the environment

Question 6

Explain what is meant by an exchange rate

Answer 6

The value of a pound in terms of another currency

Question 7

The £ strengthens from £1 - $1.40 to £1 - $1.56. How much less does a $500 order form the uk now cost?

Answer 7

357.14 - 320.51 = £36.63

Question 8

Identify two impacts to a uk business of the £ weakening against the $

Answer 8

They will have to pay more for imports

The us is more likely to buy from them