International trade

Question 1

Classify transactions into international trade and domestic trade

Answer 1

International trade is the exchange of goods and services across international borders, and Domestic trade is exchange of goods and services in a local market.

Question 2

Asses the benefits of international trade

Answer 2

1. Access to resources that may be scarce locally
2. Increased variety quality of goods and innovation.
3. Lower prices due to increased competition and efficient production.
   4.Economic growth and job creation
   .

Question 3

Elaborate on the factors that determine international competitiveness

Answer 3

1. Productivity meaning of PPC shift out as producing more with the same amount of resources can lower costs and improve quality making products more competitive.
2. Inflation as it can make a countries products, more expensive and less attractive. International buyers, hurting competitiveness.
3. Exchange rates as a weaker currency can make exports cheaper and more competitive abroad.
4. Tax rates as lower taxes and businesses can reduce costs and increase profits, allowing companies to invest more in improving their products.

Question 4

Assess the benefits of improving international competitiveness

Answer 4

Increased imports as well countries become more competitive. Its products are more appealing to people. In other countries, which can lead to higher revenues for businesses and contribute to our country’s economic growth

Job creation, as when businesses, grow and export more they must hire workers which can reduce unemployment and improve living standards

Higher quality products as to stay competitive companies must constantly innovate and improve their products which enhances overall quality of life

Lower prices has increased competition can drive companies to become more efficient and reduce costs which often leads to lower prices for consumers