Trade Flashcards
1
Q
What is Free Trade Agreement (FTA)
A
Free movement of goods and services across national borders with no protection to trade.
2
Q
What is Comparitive advantage
A
Occurs when a country is relatively better at producing one product rather than another.
3
Q
What is absolute advantage
A
A country that has absolute advantage in production of a product, producing products more efficient than another country.
4
Q
What are the types of protection
A
Subsidies, Tariff, Quotas and Embargoes
5
Q
What is protection?
A
which domestic producers are shielded from the competition of overseas producers.
6
Q
Reasons for trade
A
Specialisation, Different factor endowments and Political & Strategic benefits.
7
Q
What are the 7 arguments for protection?
A
- Infant Industry
- Diversification
- Favorable Balance of Trade Argument
- Increased Employment Argument
- Cheap Foreign Labour Argument
- Anti-dumping argument
- Defense argument.
