EU Single Market

Question 1

4 freedoms of movement

Answer 1

goods
service
people
capital

no restriction on how much, how often, where and when you move it

Question 2

economic advantages

Answer 2

• higher levels of competition ~ high quality, low price, better standard of living
• bigger range of customers to sell to
• none EU companies set up in EU countries to access single market ~ jobs & investment
• bigger pool of labour to choose from ~ lower wages and lower costs for firms

Question 3

economic disadvantages

Answer 3

• competition ~ job losses if not competitive on price & quality
• if migrant workers are cheaper, domestic workers either lose job or have to lower wage

Question 4

benefits of trade

Answer 4

specialisation to achieve greater productive efficiency

absolute advantage increases output to a higher level

• competition ~ pressure on suppliers to keep price down ~ improve productivity & efficiency
• better use of scarce resources ~ used effectively in specialisation
• EG and development ~ world output rises

Question 5

risks of trade

Answer 5

• opening up economy to trade can cause structural unemployment as demand for your good falls and imports rise
• volatile global prices can affect export revenues and profit ~ reliant on income from a good

Question 6

free trade vs protectionism

Answer 6

FT :
a policy where countries don’t restrict imports from or exports to other countries

P :
- gov actions that restrict trade ~ intention to protect domestic businesses and jobs

Question 7

methods of protection

Answer 7

TARIFF :

• a tax on an imported good
• give get revenue & better BoP from lower imports
• consumers pay high price, peeps sell less
• shifts supply curve to left

QUOTA :

• restriction on quantity of an import ~ S curve is vertical
• BoP and domestic producers gain from lower competition
• consumers get high price and less choice and foreign producers sell less