Theme 4 - 1.2 - International trade Flashcards
1
Q
What is specialisation ?
A
The process of focusing on a specific skill or task.
2
Q
What are the advantages to specialisation ?
A
- Increased productivity and reduced unit costs.
- increased productivity leads to GDP growth.
3
Q
What is FDI?
A
Foreign direct investment.
4
Q
What is globalisation ?
A
The world becoming more interconnected through trade.
5
Q
What is trade liberalisation ?
A
The process of making international trade easier by relaxing trade barriers and tariffs.
6
Q
What are the benefits to trade liberalisation ?
A
- consumers benefit from cheaper prices.
- increased competition.
7
Q
What are the disadvantages of trade liberalisation ?
A
- structural unemployment.
- infant industries face extreme competition and go out of business.
8
Q
What are the disadvantages to specialisation ?
A
- A country may become overdependent on another country.
- Countries may suffer from diseconomies of scale as a result of the business getting too big.