Theme 4 - 1.2 - International trade Flashcards

1
Q

What is specialisation ?

A

The process of focusing on a specific skill or task.

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2
Q

What are the advantages to specialisation ?

A
  • Increased productivity and reduced unit costs.
  • increased productivity leads to GDP growth.
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3
Q

What is FDI?

A

Foreign direct investment.

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4
Q

What is globalisation ?

A

The world becoming more interconnected through trade.

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5
Q

What is trade liberalisation ?

A

The process of making international trade easier by relaxing trade barriers and tariffs.

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6
Q

What are the benefits to trade liberalisation ?

A
  • consumers benefit from cheaper prices.
  • increased competition.
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7
Q

What are the disadvantages of trade liberalisation ?

A
  • structural unemployment.
  • infant industries face extreme competition and go out of business.
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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.
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