Trade Flashcards
Why do countries trade?
To obtain resources they don’t have
Richer countries can help poorer countries
Cost minimisation where richer countries buy products and receive cheaper labour costs in return
Source of income: countries can sell their resources for more money
Other countries resources may be better quality
Larger market for more potential products
How has communication technology changed the shopping behaviours of consumers?
Wider range of goods/ products available
Consumers can compare products and prices
Geographical distance is bit a problem because goods can be sent via courier eg FedEx
Domestically produced goods need to be more competitive
What is the political sphere?
Trade is unable to take without government support. Some countries use polices to limit or regulate international trade, in order to protect their industries by imposing tariffs, (tax) quotas or subsides.
What are disadvantages of trade?
If a country says no to trade and they have a product that can make your country better
Effect on domestic industries if they are no restrictions on foreign trade. It maybe ruin industries
Importing harmful goods in order to make profit for the trader
Why is trade political rather than a business?
As the international trade can only happen with the governments support without their political support international trade would not happen, international trade becomes a business after the government agrees.
