asdaDASDAACTIVITIES

Answer the following questions.

1. What does international trade allow us?
International trade allows us to expand our markets for both goods and services that
otherwise may not have been available to us.
2. What is the result of international trade?
As a result of international trade, the market contains greater competition and
therefore more competitive prices, which brings a cheaper product home to the
consumer.
3. What is international trade?
International trade is the exchange of goods and services between countries.
4. What is the benefit of trading globally?
Gives rise to a world economy, in which prices, or supply and demand, affect and are
affected by global events.
5. What is specialization in international trade?
Some countries may produce the same good more efficiently and therefore sell it
morecheaply than other countries. If a country cannot efficiently produce an item, it can
obtain the item by trading with another country that can.
6. What are the effects of specialization?
Reduces their opportunity costand therefore maximizes their efficiency in acquiring the
goods they need. With the greater supply, the price of each product would decrease,
thus giving an advantage to the end consumer as well.
7. What are other possible benefits of the specialization?
Allows countries to participate in a global economy, encouraging the opportunity of
foreign direct investment (FDI), which is the amount of money that individuals invest
into foreign companies and other assets.

8. What is the difference between free trade and protectionism?

Free trade has not restrictions on trade. The main idea is that supply and demand
factors, operating on a global scale, will ensure that production happens efficiently. In
contrast, protectionism holds that regulation of international trade is important to
ensure that markets function properly.
9. Write the meaning of the following words related to international trade:
a. Supply: Total amount of a specific good or service that is available to consumers
b. Country`s current account: The current account is used to mark the inflow and
outflow of goods and services into a country.
c. Foreign direct investment: is an ownership stake in a foreign company or project
made by an investor, company, or government from another country.
d. Revenues: Revenue is the money generated from normal business operations,
calculated as the average sales price times the number of units sold.
e. Tariff: A tariff is a tax imposed by one country on the goods and services imported
from another country to influence it, raise revenues, or protect competitive advantages.