Chap 14&15: Globalisation And The International Economy

Question 1

Define CA

Answer 1

A country enjoys CA over another when it can produce a good with a lower opportunity cost in terms of other goods forgone.

Question 2

Define Principle of CA

Answer 2

It states that all countries can benefit from free trade if a country specialises in the production of good that it has a CA in.

Question 3

Define economic integration

Answer 3

It involves the agreement between countries that usually include the elimnation of trade barriers and increases flow of labour and investments.

Question 4

Define globalizatio

Answer 4

It is a phenomenon where countries become increasingly integrated and interdependent. It is acheived by increasing economic cooperation between countries (e.g signing of FTA)