Theme 3 - Trade and growth

?
  • Created by: becky.65
  • Created on: 12-02-18 10:18
How have exports and imports grown so substantially since 1950?
It has become easier to trade internationally
1 of 25
In the past, why did government restrict trade?
They feared imports might reduce demand for their own products so they used tariffs to make imports dearer and discourage people from buying them
2 of 25
Why did governments start to reduce tariffs?
They saw that trade restrictions were discouraging sales of their own exports, so if they all reduces trade barriers together then prices would fall so there would be more economic growth and spending power would increase
3 of 25
What is trade liberalisation?
Reducing barriers to trade so that economies can move gradually closer to free trade
4 of 25
When was the World Trade Organisation formed?
1995
5 of 25
What is the aim of the WTO
To oversee and regulate the international trading environment
6 of 25
What is the WTO main objective?
To help trade flow smoothly, promote free trade and encourage economic growth by reducing trade barriers
7 of 25
What does the WTO do to help developing nations?
It helps with technical matters and training programmes
8 of 25
How does the WTO help with trade disagreements?
It provides a dispute resolution mechanism for member countires
9 of 25
What does the WTO not do?
It is not a global policeman and it cannot force countries to co-operate
10 of 25
How has the WTO been criticised?
It can been accused of favouring the richer countries at the expense of the developing ones and some doubt that free trade is the best solution for developing nations
11 of 25
What is specialisation?
Producing more of the goods and services that have a competitive advantage
12 of 25
How can specialisation help to increase total output?
If countries specialise in products in which they have a competitive advantage and export as much as they can, and increase imports from other economies that have a competitive advantage in other products, then increase trade will increase total outp
13 of 25
What does specialisation lead to?
Enhanced economic growth; GDP and personal incomes increase
14 of 25
How does specialisation help create a competitive advantage?
Individuals specialise and become more competent in their work so fewer employees are needed. The availability of finance for investment allows businesses to use the best technologies so productivity of capital and labour increases so over time
15 of 25
What does trade liberalisation help with?
Increased exports, finding new markets to specialise and have economies of scale because businesses can expand faster
16 of 25
What does trade liberalisation encourage to develop?
Different supply chains; particularly business to business
17 of 25
Why might businesses choose the business to business supply chain?
They choose other businesses as they are the most efficient and have a competitive advantage in whatever process they supply so it is cheaper for the main company
18 of 25
What has outsourcing and offshoring helped to do?
Cut costs and given many emerging economies faster economic growth
19 of 25
What is outsourcing?
Buying in goods or services from other businesses
20 of 25
What is supply chain management?
Organising the sequences of processes that leads to the sale of the final product. Managers must locate the supplier with the greatest competitive advantage so that costs are minimised
21 of 25
How can complex supply chains create opportunities for new businesses to grow?
They minimise the resource costs of production, open up new markets and make it easy to expand across many locations
22 of 25
As trade barriers are reduced, what is increased?
The flow of FDI as businesses set up factories or other production or distribution facilities abroad
23 of 25
What might FDI also be associated with?
The offshoring of production to countries with lower input costs, or with production for foreign markets
24 of 25
Why do all governments welcome FDI?
It provides finance for investment and helps to create jobs
25 of 25

Other cards in this set

Card 2

Front

In the past, why did government restrict trade?

Back

They feared imports might reduce demand for their own products so they used tariffs to make imports dearer and discourage people from buying them

Card 3

Front

Why did governments start to reduce tariffs?

Back

Preview of the front of card 3

Card 4

Front

What is trade liberalisation?

Back

Preview of the front of card 4

Card 5

Front

When was the World Trade Organisation formed?

Back

Preview of the front of card 5
View more cards

Comments

No comments have yet been made

Similar Economics resources:

See all Economics resources »See all Globalisation and trade resources »