Chapter 67 - International Trade and Business Growth

Question 1

Comparative advantage

Answer 1

The theory that a country should specialise in products and services that it can produce more efficiently than other countries

Question 2

Competitive advantage

Answer 2

The idea that a business should specialise in any area (products, services, management, research) where it can perform better than its competitors

Question 3

Division of labour

Answer 3

Different workers specialising in different productive activities

Question 4

Exports

Answer 4

Goods or services that a firm produces in its home market, but sells in a foreign market

Question 5

Foreign direct investment (FDI)

Answer 5

Investing by setting up operations or buying assets in businesses in another country

Question 6

Imports

Answer 6

Goods and services that are bought into one country from another

Question 7

International trade

Answer 7

Exporting and importing (selling abroad and buying from abroad)

Question 8

Specialisation

Answer 8

A production strategy where a business focuses on a limited scope of products or services. This results in greater efficiency, allowing for goods and services to be produced at a lower cost per unit

Question 9

Tariffs

Answer 9

Taxes that are imposed on imports