Patterns of Trade

Question 1

what is the trade intensity ratio (what is the formula)

Answer 1

measures importance of international trade - trade to GDP ration
(X+M)/GDP x 100

Question 2

what are the 3 factors affecting trade intensity

Answer 2

1. relative size of economy (TI small for big economies b/c domestic economy is big)
2. location relative to foreign markets
3. extent to barriers to trade

Question 3

describe the changes in australia’s comp of trade (2 points ) with the stat for the current % of exports in 2020

Answer 3

• shift from agricultural/rural to manufacturing good 52% man - 10% rural
• service exports increased as income increased (21%)

Question 4

what has driven change this change in composition

Answer 4

rapid growth in Asian economies result in boom for AUs resources mining boom

Question 5

what is the shift in direction for australia’s trade and what % of trade do these two areas make up

Answer 5

from europe (40% to 10%) to pacific asian region (50%)

Question 6

why is Asia such a big part of our trade

Answer 6

1. lower transport cost
2. Asia’s large growing population
3. limited resources relative to population so Aus provides