Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
17 Cards in this Set
- Front
- Back
|
7 reasons for restrictions on free trade |
-to protect infant industries -protect sunset industries -ensure employment protection -prevent dumping -correcting a current account deficit - restricting imports from countries with poor health/safety/environment regulations -strategic reasons -retaliation |
|
|
Infant industries |
Industries in their early stages which may struggle competing internationally |
|
|
Dumping |
Goods being exported to another country at below the average cost of production. Illegal under WTO but hard prove |
|
|
What are tariffs and sketch the diagram |
Taxes on imported goods |
|
|
Quota |
Physical limit on the number of goods that can be imported |
|
|
5 restrictions on free trade |
-tariffs -quotas -subsidies to domestic producers -administrative barriers -exchange rate manipulation |
|
|
Trading blocs |
A group of countries that trade freely but protect themselves from imports from non members |
|
|
Free trade area |
An agreement between two or more countries to abolish tariffs on trade between themselves |
|
|
Customs union |
Free trade area with a common external tariff |
|
|
Common/single market |
Customs union with the free movement of factors of production and agreement on state aid and public sector policies |
|
|
Monetary union |
Single market with shared monetary policy |
|
|
5 benefits of trade agreements |
-improved comparative advantage -makes firms more efficient -fewer restrictions/ bigger market, increased EoS -trade creation -attraction of FDI |
|
|
Trade creation |
Where economic intergration results in high cost domestic production being replaced by imports from a more efficient source within free trade area |
|
|
Trade diversion |
When a common external tariff results in trade switching from a low cost supplier outside the trade area to a less efficient source within the area |
|
|
6 things the impact of economic integration will depend upon |
-the extent to which it is deployed -relative efficiencies of countries inside and outside of the region - strength of comparative advantage -price elasiticities of demand and supply -how many goods are included in agreement -how non members react |
|
|
WTO |
World Trade Organisation- international body whose purpose is to promote free trade by persuading countries to abolish tariffs |
|
|
Three criticisms of WTO |
-slow to decide -disputes remain unsettled -accusations that the imposition of free trade makes countries more impoverished |
