International Trade

Question 1

What is import?

Answer 1

Bringing in goods from another country for sale

Question 2

What is export?

Answer 2

Goods manufactured in the UK and sold abroad

Question 3

What is export?

Answer 3

Goods manufactured in the UK and sold abroad

Question 4

Positives of International Trade

Answer 4

+ Increase in jobs —> Decrease in poverty
+ Low prices for consumer as increased competition
+ Technology is spread
+ Knowledge and skill is shared
+ Economies of scale
+ Better use of scarce resources

Question 5

Negatives of International Trade

Answer 5

• Transport costs
• Negative externalities from production
• Structural unemployment as patterns of trade change
• Rising inequality/uneven trades
• Pressure on wages/working conditions

Question 6

What is specialisation?

Answer 6

Countries that choose to specialise/focus on products/goods/services, leading to a comparative advantage

Question 7

Positives of specialisation and comparative advantage

Answer 7

+ Increased productivity and output
+ Economies of scale
+ Scale and spread out production
+ Comparative advantage over next country
+ GDP growth

Question 8

Negatives of specialisation and compartitive advantage

Answer 8

• Over reliant on one industry
• Greater risk
• Other countries may become cheaper —> hard to compete
• Suffer from diseconomies of scale

Question 9

What is FDI?

Answer 9

Foreign Direct Investment - investment from one country into another (company) that involves establishing operations or acquiring tangible assets

Question 10

What is inward FDI?

Answer 10

Overseas business decides to builds manufacturing factory in the UK

Question 11

What is outwards FDI?

Answer 11

UK business decides to build a manufacturing factory overseas