international trade

Question 1

what does globalisation affect in terms of trade?

Answer 1

it affects the volume and pattern of international trade and investement

Question 2

what has happened since the second world war?

Answer 2

the volume of trade has increased

Question 3

what organisation was created near the second world war that may be linked to increase in trade?

Answer 3

th UN

Question 4

what is international trade?

Answer 4

the movement of goods and services from a producer to a consumer

Question 5

what are the different sectors in industry?

Answer 5

primary
secondary
tertiary

Question 6

what is the primary sector of industry?

Answer 6

the extraction of raw materials

shell

Question 7

what is the secondary sector of industry?

Answer 7

the production of manufactured goods from food to electronics

Question 8

what is the tertiary sector of industry?

Answer 8

it is the trade of services including legal and educational

aviva car insurance

Question 9

what is comparative advantage?

Answer 9

the idea that one country is more able and efficient to manufacture/trade certain products compared to others

Question 10

how does comparative advantage affect trade patterns?

Answer 10

people who have comparative advantage in one product will become the main producer and import products that they are less able to obtain inside their country

Question 11

what is economies of scale?

Answer 11

producing a narrower range of products means that a country can produce in higher volumes and at a cheaper cost

Question 12

how does an increase in trade affect pruchasing power?

Answer 12

there is increased competition that lowers the prices allowing consumers to buy more for their money
international businesses want as many consumers as possible as they can then become an economy of scale

Question 13

what is the multiplier effect and how can this be created through trade?
(also in TNC section)

Answer 13

where when a business starts that exports
manufacturing will create jobs
local businesses benefit as more jobs are created so people have more money to spend
affecting government etc

Question 14

what is the impact of trade on local businesses?

Answer 14

due to the size of large trading companies and low costs due to competition
local businesses may find it hard to be able to lower their prices to the same extent

Question 15

how can competition and lowering prices result in ‘product dumping’?

Answer 15

business may export their products for a much lower price in the foreign markets than the price sold domestically
resulting in a potential loss

Question 16

who is at risk of product dumping?

Answer 16

farming in less economically developed countries `

Question 17

why might de skilling take place?

Answer 17

manufacturing has become from technological based due to machines so traditional skills and crafts have been lost

Question 18

how can trade exploit and produce labour intensive industries?

Answer 18

in most businesses labour is one of the biggest costs

reductions can be made in labour even when working conditions are compromised

Question 19

who deals with the global rules on trade>

Answer 19

the world trade organisation

Question 20

what do the world trade organisation do?

Answer 20

deals with global rules of trade between countries

facilitates international trade

Question 21

what are the world trade organisations main aims?

Answer 21

to liberalise trade by reducing barriers
act as a forum for sorting out disputes between governments
provide confidence that there will be no sudden changes