1. Advantages of being in a trading bloc:
- The benefits of free trade between countries in different blocs are lost
- Products cost more for consumers because efficient producers from outside the bloc may have tariffs added to them
- Firms inside the bloc are protected from cheaper imports from outside e.g. EU shoe industry from China/Vietnam imports
- It reduces the beneficial effects of specialisation
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2. Give some examples of trading blocs:
- BFC, NFFC, & SMO
- PTO, the BU, & AZEAN
- The EU, ASEAN, & NAFTA
- EQ, HTO, & TSFC
3. Definition of globalisation?
- "If everyone decided to travel around the globe"
- "The increased freedom and capacity of individuals and firms to undertake economic transactions with residents of other countries on a global scale"
- "The decreased freedom and capacity of individuals and firms to undertake economic transactions with residents of other countries and operate on a global scale"
- "When a business successfully enters every single market on the globe"
4. What is Protectionism?
- An idea formed to create competition for home industries
- Removing restrictions or barriers on the fre e exchange of goods between countries
- Shielding a country's domestic industries from foreign competition by taxing imports
- A method to encourage imports to your country
5. What is a benefit of global sourcing?
- The cost of training the new workers
- Higher risk of loss of intellectual know-how
- Potentially significant labour cost reductions
- Impact on existing workers
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