Trading Blocs

Question 1

Terms of trade

Answer 1

• ‘Terms of trade’ refers to the cost of goods that a country has to import, compared to the price at which they can sell the good they export.
• HICs tend to import primary products from LICs and turn these into manufactured goods for export to word markets – the value of the products increases as it passes through the HICs.

Question 2

Free trade

Answer 2

When international trade is left to its natural course. It involves removing barriers to trade

Question 3

Quota

Answer 3

: a restriction on the number of a product that can be imported

Question 4

Protectionism

Answer 4

Some countries limit trade using tariffs and non-tariff barriers to shield their industries from foreign competition

Question 5

Economic reasons countries group together

Answer 5

To protect their economies
To enhance their economies
To improve trade between economies
To help more deprived areas

Question 6

Social reasons countries group together

Answer 6

To improve social standards of living
•To improve development levels •To share knowledge and allow growth
•To allow movement between countries

Question 7

Political reasons countries group together

Answer 7

• To increase political strength
• To maintain peace and international agreement

Question 8

What is a trading bloc

Answer 8

• A trade bloc is a group of countries within a geographical region that protect themselves from imports from non-members.
• Trading blocs are a form of economic integration, and increasingly shape the pattern of world trade. They support free trade between member countries without incurring tariffs or charges.

Question 9

Policies of the EU (seven)

Answer 9

1. Single Market
2. Common Currency
3. Agriculture (giving aid to develop the countryside/agricultural production)
4. Environment (protecting nature + environment)
5. Employment
6. Security (Europol EU law enforcement agency)
7. Foreign Policy- International policies

Question 10

Successes of the EU

Answer 10

-free movement of people
-encourages FDI therefore positive multiplier effect
-ensures food security in Europe

Question 11

Failures of the EU

Answer 11

-Knock on effects of recession e.g., the EU has given Greece bailout loans to support it during financial crisis which has affected the European economy.
-Differences in development of joining countries encourages migration of workers – leads to tensions.
-Growth of separatist movements e.g. Scottish Nationalist Party is very popular.