Trade Flashcards
Define FTA’s
Free Trade Agreements are agreements between two or more countries designed to reduce or eliminate certain barriers to trade and investment
What is Specialization
Specialization is a method of production where a country would focus on the production of goods in which they have a comparative advantage to.
Define Trade liberation
Trade liberation is the removal of restrictions or barriers on the free exchange of goods between countries
What are AU’s major imports and where do they come from?
Petroleum, furniture and vehicles. they come from China, USA, Japan, Germany and Thailand
What are AU’s major exports and where do they go?
Coal, Iron, Natural gas and gold. They go to China, Japan, India, South Korea and USA.
What are the main Advantages of International Trade?
- Economic Improvements in standards of living
- More resources for production of goods for consumers
- Injections (exports) cause economic growth
- Increased competition
- Increased Revenues
- Low prices
- Specialization increase
Main Disadvantages of International Trade?
- Environmental pollution
- Increase of child labor
- Causes Global health issues (covid)
- Imports are withdrawals from circular flow and reduces economic growth
What is happening if there is a Deficit?
When there is a deficit, a country is importing more than exporting
What is happening when there is a Surplus?
When there is a surplus, a country is exporting more than importing
What is Chinas trading relationship with AU?
China is AU’s biggest trading partner, with 25% of AU’s manufactured imports coming from China. Iron ore exports are gaining AU 266.2M.
What does the PPF stand for and what does it demonstrate?
PPF stands for production possibility frontier. The PPF demonstrates that the production of one commodity may increase only if the production of the other commodity decreases.
What is AU’s balance of trade?
The amount of imports compared to exports is 28, 242
