International Trade:

the advantages of trade and the consequences of global interdependence to the UK economy.

The advantages of international trade are that it lead to higher standards of living as there are
usually lower priced goods (Higher competition can lead to lower prices as firms will fight over who
has cheaper products).

A disadvantage of globalisation is that it can lead to small businesses losing out on customers as
MNCs will have far more control/power over market than the small businesses and predatory
techniques can be used.

Exploits cheap labour markets in countries such as China and Vietnam where labour prices are
extremely cheap relative to other countries

Exchange rate:

How exchange rates are determined

Exchange rates are demanded by supply and demand

The effects of changes in the exchange rate on consumers and producers

Exchange rates increasing (pound getting stronger) means that consumers will have to pay less
pounds to buy goods from foreign countries, pound getting weaker means that they will need to pay
more pounds to buy the goods and services from foreign countries. For producers, if pound gets
more expensive exporting will have a lower demand as foreign customers will need to pay more, and
therefore a decrease in demand. If pound gets weaker, foreign customers will need to pay less to
buy the products and so demand will increase as purchasing goods from foreign countries will be
cheaper whilst also making the same profit for each item.

Students should be able to understand how exchange rates are determined through the interaction
of demand and supply.

Explained above ^

Stronger pound Imports cheaper exports dearer

Free Trade:

Give 4 advantages and 4 disadvantages, explain them.

Free Trade leads to economic growth as there is a bigger market, therefore more revenue, and more
investment options for firms, and this increases aggregate demand.

Free trade leads to more goods and services being sold, and therefore, governments will be able to
gain more tax revenue from sales of goods and services.

Benefits from economies of scale

Greater choice of goods as more people will be buying/selling

Leads to illicit markets being created as a result of less regulation

People need to learn about foreign policies and regulations to send goods abroad, so they don’t get
into any legal trouble such as sending phones with have lithium ion batteries which are excluded
from being traded

Poor Working Conditions: Multi-national companies may outsource jobs to emerging market
countries without adequate labour protections

IDK one more

the significance and benefits of free-trade agreements, such as the EU.

Free trade agreements can lead to more incentive and so more innovation in work as there are no
trade tariffs and no external tariffs.

Increases access to higher quality, lower priced goods as there is more competition

Free trade leads to easing of regulations and tariff for smaller, domestic businesses and this means
that they can grow, promoting growth of smaller businesses and sale at local shops

A growth in small domestic companies also creates more job opportunities

Globalisation:

Main features of globalisation

The world getting more interconnected as a result of international trade and working practices

Give 2 benefits and disadvantages of globalisation for consumers, producers, and government to
developed and less developed (I know this is long, but you need to know this)

ben
con Can lead to higher quality
goods
Can lead to cheaper goods
being sold
pro Increases choice of suppliers
for them as there is more
interconnection in the world
Wider market of consumers
for producers
gov Increase tax revenue
Improve international
relationships
Improve in standards of living
disadvantage
Higher barriers to becoming
producers (as a result of more
competition in markets)
Possible monopolies which
means that it could lead to less
variety of options
Will give them more
competition and therefore less
demand for their products
Supply could be shortened as
suppliers might sell to other
producers
Limit to government power as
MNCs might have more power
Difficult to regulate all firms
Health & safety?
the factors that have contributed to the growth of globalisation, including new technology and the
operations of multinational companies

Factors that have led to an increase in globalisation are IMF & WTO,

Better transportation

Better communication
MNCs as when they grow, they can go to other markets and better relationships

Increased living standards

Moral or ethical and sustainability considerations?

MNCs tend to take advantage of cheap labour markets in foreign countries which have a lack of
regulation and protection for workers, this overall means that the MNCs will have to pay far less for
the labour costs.

MNCs usually have a negative effect on the environment when they newly produce in a host country
due to their greater technological capacity

What is a trade bloc? Give a few examples and explain their differences

A group of countries that agree to reduce/eliminate trade barriers among their members

EU is an example of a customs union

Nafta is a pta (preferential trade area)

Explain what Protectionism is

Protectionism involves any attempt by a country to impose restrictions on the open trade in goods
ands services

What do tariffs lead to to extra tax on an import to increase its price and decrease demand, this
means that there will be more demand for domestic companies (tariff leads to increase in
cost of production

Give 4 things that are examples of protectionism

Tariffs, quota, government legislations such as only allowing a cap of 200 foreign employees in our
country, subsidies given to domestic companies so they can fight back against MNCs

Explain each one of these 4 and what they can lead to (e.g. tariff leads to increase in cost of
production…)