Economics Theme 4

Question 1

Globalisation

Answer 1

Globalisation is the process by which the world is becoming increasingly interconnected as a result of massively increased trade and cultural exchange.

Question 2

Absolute Advantage

Answer 2

When a country can produce more of a product than another.

Question 3

Comparative Advantage

Answer 3

When a country can produce a product at a lower opportunity cost than another country, thus having a relative advantage in producing that product.

Question 4

Trade Bloc

Answer 4

A group of countries that trade freely but protect themselves from imports of non-members.

Question 5

Terms of Trade

Answer 5

(Index of export prices)
__________________ x100
(Index of import prices)