International Trade

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Define International Trade?
Consists of buying and selling exports and imports between countries.
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What is Trade Liberalisation?
The process of limiting and reducing barriers to trade so that economies can move towards free trade.
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Explain what Non-competitive Government contracts are?
They give favourable contracts to domestic businesses not necessarily the cheapest.
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What is the purpose of an embargo?
Prevent exports to certain countries.
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Define a tariff?
A tax on imported goods
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Define a Quota?
It is a limit on the quality imported
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Using a Demand/Supply diagram reference explain the Tariff process?
At any given price a supplier would be willing to supply less. Therefore the supply curve shifts to the left.
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Using a Demand and Supply reference explain the Quota process?
Businesses would be willing and able to supply at a maximum quantity.
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What are Tariffs and Quotas mainly used for?
Protect particular industries e.g Agriculture
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How does a Tariff benefit the government?
Raises taxes
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What type of product will the government impose a tariff?
A price inelastic good so that demand is not effective.
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How does a Tariff stop unfair competition?
Stops deter dumping. E.G to stop people selling products in another country for a lower price.
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Give a reason for International trade?
Extends the Product Life Cycle. When a business reaches its maturity stage a business will use this to stop a decrease in sales.
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How does International Trade improve technology?
With new product advances you can target overseas markets that do not have this.
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What else is gained with IT?
A competitive advantage- gaining more market share by selling more units. Allows you to increase prices as products become more inelastic.
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What does Target Emerging Economies signify?
An increase in GDP as the size of the economy increases.
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Identify some of the features of a Target Rich economy?
Niche/Global Markets. High disposable income/luxury products
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What should businesses take into consideration when trading internationally?
Look for a domestic recession and Monopoly power.
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What is the benefit of buying from abroad?
Cheaper raw materials / products which decreases variable costs.
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Identify what off-shoring is?
Transfer Production Overseas which could decrease FC
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Other cards in this set

Card 2

Front

What is Trade Liberalisation?

Back

The process of limiting and reducing barriers to trade so that economies can move towards free trade.

Card 3

Front

Explain what Non-competitive Government contracts are?

Back

Preview of the front of card 3

Card 4

Front

What is the purpose of an embargo?

Back

Preview of the front of card 4

Card 5

Front

Define a tariff?

Back

Preview of the front of card 5
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