T1: Trade in the Global Economy Flashcards
1
Q
What is a country’s gross trade balance?
A
Exports-Imports (only measures 2 countries)
2
Q
What is a country’s value added trade balance?
A
Measures the value added in each country along the production of an imported good
3
Q
What sucks about the first-age of trade
A
the first age of trade saw massive tariffs instated by the Smoot-Hawley Act following the 1929 Black Friday Wallstreet crash and lead to protectionist trade practices
4
Q
What characterizes the second-age of trade?
A
- Shipping container reducing shipping costs
- Neoliberal trade policies led to trade liberalisation, relaxation of currency convertibility and ease of balance of payments restrictions
5
Q
What is Horizontal FDI?
A
FDI between similar countries
6
Q
What is Vertical FDI?
A
FDI from a rich country to a developing country
7
Q
What is reverse vertical FDI?
A
FDI from a developing country to a rich country