International trade and business growth

Question 1

International trade

Answer 1

Exchange of goods and services.

Question 2

Who does trade take place between?

Answer 2

Economic agents

Question 3

Economic agents

Answer 3

Businesses
Governments
Consumers

Question 4

What can International trade do?

Answer 4

Sustain GDP growth
Sustain employment
Rise living standards

Question 5

Benefits of international trade

Answer 5

Help to reduce poverty
Low prices for consumers
Raises productivity

Question 6

Why does international trade help to reduce poverty?

Answer 6

Because it exports revenues and jobs.

Question 7

Why does international trade low prices for consumers?

Answer 7

Because markets are more competitive.

Question 8

Why does international trade raise productivity?

Answer 8

Because technology is spread.

Question 9

Drawbacks of International trade

Answer 9

Transport costs.
Pressure on wages and working conditions.
Risks from global external shocks.

Question 10

Imports

Answer 10

Goods and services bought by people and businesses from one country to another.

Question 11

Exports

Answer 11

Goods and services sold by domestic businesses to another country.

Question 12

Who does imports generate money for?

Answer 12

Foreign businesses

Question 13

Who does exports generate money for?

Answer 13

Businesses selling abroad

Question 14

Specialisation

Answer 14

When a country or business decides to focus on providing a particular good or service.

Question 15

Example of a business specialising

Answer 15

Apple focuses on technological products and services.

Question 16

Examples of a country specialising

Answer 16

Ghana focuses on providing coco.

Question 17

What can specialisation do?

Answer 17

Increase the quantity and quality of goods and services.

Question 18

Benefits of specialisation

Answer 18

Lower unit costs.
Lower prices for consumers.
Excess ouput can be sold abroad.

Question 19

Why is there lower unit costs?

Answer 19

due to economies of scale.

Question 20

Why is there lower prices for consumers?

Answer 20

Because there is lower unit costs.

Question 21

What can specialising lead to?

Answer 21

A competitive advantage

Question 22

Why can specialising create a competitive advantage?

Answer 22

Due to an increased value of goods and services.

Question 23

Foreign direct investment

Answer 23

Investment by foreign firms which result in more than 10% share of ownership of domestic firms.

Question 24

What do foreign direct investments grow through?

Answer 24

Merger
Takeover
Partnership

Question 25

What are FDI’s created with?

Answer 25

Other foreign countries

Question 26

What do FDI’s do?

Answer 26

Enter new markets.

Question 27

How do countries benefit from FDI’s?

Answer 27

Increased economic growth
Increased job opportunities
Access to knowledge and expertise from foreign investors

Question 28

How do businesses benefit from FDI’s?

Answer 28

Access to new markets
Access to resources
New partners

Question 29

Inward FDI

Answer 29

When a foreign business invests in the local economy.

Question 30

Outward FDI

Answer 30

When a domestic business expands it’s operations to a foreign company.

Question 31

Why are some countries better at specialising than others?

Answer 31

Relatively less opportunity costs in comparison to another country
Country more productively efficient than another.