T1: Trade in the Global Economy Flashcards

1
Q

What is a country’s gross trade balance?

A

Exports-Imports (only measures 2 countries)

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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

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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

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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
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5
Q

What is Horizontal FDI?

A

FDI between similar countries

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6
Q

What is Vertical FDI?

A

FDI from a rich country to a developing country

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7
Q

What is reverse vertical FDI?

A

FDI from a developing country to a rich country

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