Pattern Of Trade ✅

Question 1

What is the pattern of trade?

Answer 1

Nature of trade between two countries and how this can change over time.

Question 2

What are the factors that influence the pattern of trade?

Answer 2

• Comparative advantage.
• Emerging economies.
• Trading blocs + bilateral agreements.
• Relative exchange rate.

Question 3

How does comparative advantage effect the pattern of trade?

Answer 3

Countries tend to exports g/s they have a competitive advantage and import opposite.
Therefore changes will effect g/s exported/imported.

Question 4

Example of competitive advantage effecting patterns of trade?

Answer 4

Developing countries are making more manufactured goods due to having lower wage costs.
De-industrialisation of uk as meant they export more services.
Manufacturing shifted to other countries like china.

Question 5

How does emerging economies effect the pattern of trade? Example?

Answer 5

Shift the pattern of trade buy taking up larger proportions of other countries imports/ exports.
As emerging economies grow they desire more Imports + exports.
China.

Question 6

How is trade more important for developing economies?

Answer 6

It contributed 20% to LDC economies but only 8% to USA.

Question 7

How do trading locks and bilateral agreements effect patterns of trade? Example?

Answer 7

Impact trade flows as members within will enjoy reduced barriers/tariffs therefore trade within will increase.
Trade with others will decrease.
When uk was in EU they traded more with Europe.

Question 8

How do changes in relative exchange rate effect the pattern of trade? Example?

Answer 8

Depreciations makes a countries exports cheaper and more competitive therefore will increase. (Opposite too).
Uk trade deficit due to strength of the pound + China surplus due to weak currency.

Question 9

Do the factors operate together? Example?

Answer 9

YES.
Trading blocs can influence ability for countries to use competitive advantage with those countries.