trading blocs

Question 1

benefits of economic integration eg Africa

Answer 1

trade creation - specialise and comp adv
higher incomes and higher demand for exports so more jobs and better living standard
trade diversion moving from low cost producers outside the block to high cost inside the block
overdependance so financial crisis spreads faster

Question 2

free trade area benefits

Answer 2

regional trade increase so Econ growth increases so economies of scale and trade creation
free movement of labour increases in investment
trade diversion
loss of revenue from import tariffs

Question 3

monetary union benefits

Answer 3

less vulnerable to speculation of currency attacks
reduces translation costs and easier to compare prices
less XR risk
but lose control over monetary policy and XR policy and cant respond to shocks
some will lose some will win

Question 4

role of WTO

Answer 4

promote free trade
neg to reduce trade barriers
solve disputes

Question 5

cost benefit of joining WTO

Answer 5

increase FDI - specialise and comp adv
increased choice for consumers
e of s low prices and high profits and an increased market for exports
domestic firms can no longer compete
repatriation

Question 6

trading block benefits

Answer 6

free movement of fop
trade creation
comp adv e of s
lower prices so consumer surplus
increased competiton and innovation
bop may detroriate due to trade diversion
domestic cant compete
kinda disorts comp adv

Question 7

uk leaves eu

Answer 7

rise in unemployment as less fyi but was fid high in the first place
improves trade deficit but depends on if m is elastic and x inelastic
less growth and trade barriers so less specialisation and comp adv
can divert trade to eg Africa and America diversifying