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Unit 11 Study Guide International Trade
Unit 11 Study Guide International Trade
Quota
Limiting the amount that you can import into a country
Gives domestic producers more of the market
Administrative barriers
Making really tough barriers such as health and safety standards so that it is
difficult to sell abroad
Depreciate Exchange rate
Depreciating exchange rate making it cheaper to buy exports are cheaper and
imports are more expensive
3. Describe the pattern of international trade with reference to developed and
developing countries.
4. Identify the worlds major trading blocs eg NAFTA, EU and explain their
effects on world trade patterns.
5. Explain the role of the World Trade Organisation, using real world
examples.
6. Explain the structure of the balance of payments account and identify trends
in the B.O.P account for major world economies.
7. Evaluate policies designed to correct B.O.P deficits.
8. Use supply and demand theory to help explain how exchange rates are
determined in a free market.
Shows the price of one currency in terms of another
Currencies are brought and sold on the foreign exchange market
Demand of exports Increase in D for Export = Increase in demand for
currency
Inward foreign Direct Investment
Interest Rates- higher the interest rate
Speculation-most important things
Evaluate what will be happen for the currency
Supply
Demand for imports
Outwards FD1
Interest rates in others countries
Increase supply
Speculation
9. Examine the importance of price elasticity of demand for imports and
exports.
10. Analyse the effects of a change in a country`s exchange rate on its economic
performance.
11. Discuss the arguments for and against fixed and floating exchange rate
systems.
Fixed
Advantages
Disadvantages
-Reduced risk in
international trade
Less Flexibility.
Conflict with other
objective
Float
Automatic balance of
payments adjustment
Flexibility
Uncertainty
Lack of investment
Speculation
Inflation