Patterns Of Trade

Question 1

Factors influencing PoT (4)

Answer 1

Comparative advantage
Emerging economies
Trading blocs and bilateral agreements
Relative exchange rates

Question 2

Comparative Adavantages effect on PoT - developing countries

Answer 2

Countries trade where there’s a comparative advantage to trading
Change in comparative advantage will affect the trade pattern

Question 3

Comparative Adavantages effect on PoT - developing countries example (3)

Answer 3

There has been a recent growth in exports of manufactured goods from developing countries to developed countries
Developing countries have gained an advantage in the production of manufactured goods
Due to their lower labour costs = production shifted abroad

Question 4

Comparative advantage effect of PoT - manufacturing (4)

Answer 4

The deindustrialisation of countries such as the UK has meant the manufacturing sector has declined
Led to the industrialisation of China and India = their share of world trade has risen and the volume of manufactured goods that they export has increased
However, since China’s population is now ageing, their wage competitiveness has fallen
This is also due to the rise of the middle class in China, who demand higher wages and consume more.

Question 5

Emerging economies effect of PoT (2+)

Answer 5

When countries grow = likely to need to import more g/s than before as well as exporting more to pay for this
Emerging economies shift the trade pattern = take up a larger proportion of a country’s imports and exports than they had previously = China

Question 6

Emerging economies examples (3+ )

Answer 6

MINT - Mexico, Indonesia, Nigeria, turkey
BRIC - Brazil, Russia, India, China
RICE - Russia, India, China, equator

Question 7

Trading blocks + BA effect PoT (3)

Answer 7

Exmaple = NAFTA
Free movement of goods and services
Countries join together to increase trade

Question 8

Exchange rate effect on PoT (2)

Answer 8

The exchange rate affects the relative prices of goods between countries
Prices determining whether consumers buy goods = a change in price will affect the PoT

Question 9

Example of change in world PoT (3)

Answer 9

Chinas cpshare of world exports of electrical + electronic equaipment increased
4% in 2000 to 30% in 2018
Change PoT in east Asia - China integrated into supply chain