Unit 2.2 World Trade Flashcards
Define “natural resource”
A product provided by the earth
Define “import”
Bring goods and services into the country
Define “export”
Send goods and services to another country for sale
What is meant by “foreign exchange”?
The currency of other countries used for trade
What is meant by commodities?
Raw materials such as fuels and other minerals as well as agricultural products.
Name two benefits to consumers of international trade
More choice of goods and prices.
Name a benefit to producers brought about by world trade.
A bigger market in which to sell more goods.
Define “devaluation”
When a country’s currency is reduced in value compared with other currencies.
What is meant by a trade deficit?
It is when the value of a country’s exports is lower than its imports.
What is the opposite of a trade deficit?
A trade surplus
Name three ways in which a country can overcome a trade deficit
Develop industries to supply the domestic (home) market and so become less reliant on imports.
Encourage the growth of industries that will export high value goods e.g processed foods.
Increase the exploitation of mineral wealth for export.
Increase the production of crops for export.
Develop other industries such as tourism.
Devalue the currency.
How does devaluation help reduce a trade deficit?
It makes exports cheaper and therefore more attractive to buyers.
Define ‘neo-colonialism”
New form of dependence of a developing country on another country.
Give an example of a neo-colonial relationship which resulted in a trade deficit for a developing nation.
Chad - France
Give an example of a country that has needed to diversify after reliance on non-renewable reserves. What did it move on to?
Angola - Mining of bauxite, natural gas extraction
Define “Extractive Industries”
Those that take resources out of the ground
What is meant by “diversify”?
Give more variety to a range of products.
What is meant by “exhausted”
Completely used up
Name 3 growing export industries
Tourism Finance and insurance Computer and IT industries Communication Construction
Name the stretch of water that crossed central America to join the Pacific ocean and the Caribbean Sea
The Panama Canal
Name 2 NIC’s
Brazil Russia India China South Africa
What does FTA / FTZ stand for?
Free Trade Area / Free Trade Zone
Define “quota”
Physical limit to the quantity of goods allowed to be imported.
What is an import tariff?
A tax on imports.
What is meant by and FTA / FTZ?
It is when a group of countries join together to form a trade area in which goods and services can be traded without quotas or tariffs e.g European Union or SADC (South africa Development Community.
Define “exchange rates”
The value of a currency for the purpose of converting it to another.
What is the name of the organisation that deals with global rules of trade?
WTO World Trade Organisation
Name 3 ways the WTO tries to get trade to flow freely
Cutting tariffs and reducing subsidies on agricultural goods.
Reducing or removing tariffs on non-agricultural goods especially from developing counties.
Promoting trade in environmental technologies & renewable energy
What does OPEC stand for?
Organisation od Petroleum Exporting Countries.
Name 4 countries in OPEC
Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar, Indonesia, Libya, The United Arab Emirates, Algeria, Nigeria, Equador, Gabon, Angola.
What is the aim of OPEC
To prevent oil prices fluctuating on the world market, so that there is a regular supply for consumers and a steady supply of income for exporting countries as well as reasonable profit for oil companies such as Exxon Mobil, Shell, Total and BP.
Name two reasons prices of agricultural produce may vary on the world market.
Changes in supply - due to weather, political instability etc
Changes in demand - due to health scares, fashion, seasons etc
Define “monopoly”
When a single company controls the supply of or trade in a particular product.
What is a Fairtrade Premium?
A grant paid to farmers by the Fairtrade Foundation which can be invested in their business.
