international trade multiple choice

Study Notes

High distribution costs for Irish exports due to Ireland's geographical position as an island at the edge of Europe.
Irish firms must manage their costs effectively to maintain competitiveness against global companies.
Global companies pose significant competition with high-quality products at competitive prices, necessitating efficiency improvements and R&D investments for Irish exporters.
Language barriers complicate marketing efforts across the EU, which comprises 20 different languages affecting product names, packaging, and advertising.

A stronger Euro increases the price of Irish products in non-Euro countries, potentially decreasing sales and profits.
A weaker Euro raises costs for Irish businesses when importing materials from non-Euro countries.

Difficulty in receiving payments for exports due to varying legal systems across countries, complicating debt recovery.
Customs duties burden goods traded between EU and non-EU countries, raising export prices and reducing competitiveness.

Awareness of local customs and culture is essential for Irish firms to successfully market products abroad.
Protectionism involves governments instituting trade barriers to defend home industries against foreign competition.

Tariffs: Taxes on imports that elevate their prices, making domestic products more attractive.
Quotas: Limits on quantity of imports allowed over a specific period to favor domestic production.
Embargoes: Bans on specific goods’ import/export due to political or health reasons.
Subsidies: Financial aid provided to domestic companies to help lower their prices and maintain competitiveness.
Administrative regulations: Increased red tape and customs procedures that delay imports, discouraging competition.

Deregulation lowers legal trade barriers, enhancing competition and benefiting consumers with lower prices.
Trading blocs facilitate free trade, eliminating tariffs and reducing barriers among member countries. Types include:
- Free Trade Area: No tariffs or barriers among members (e.g., NAFTA).
- Customs Union: No tariffs among members and shared tariffs on non-members (e.g., EU).
- Common Market: Comprehensive economic integration allowing free trade of goods, services, capital, and labor.

Imports allow consumption of goods and services not available domestically, categorized as visible (physical goods) or invisible (services).
Importing reasons include sourcing raw materials, unsuitable climate for production, and consumer variety.
Visible exports entail the sale of physical goods to foreigners, while invisible exports involve services.

Higher production costs in Ireland challenge exporters against international competitors.
Growing markets in China and Japan present opportunities for Irish exporters, especially in food and drink.
Advances in technology enhance marketing reach and communication, facilitating entry into international markets.
Importance of adapting products to align with international customs and preferences.

Balance of Trade (BOT): Difference between visible exports and imports; a surplus indicates more exports, while a deficit indicates more imports.
Balance of Invisible Trade (BOIT): Measures difference between invisible exports and imports; surplus reflects greater exports.
Balance of Payments (BOP): Total money entering and leaving the country accounting for both visible and invisible trade, indicating overall trade health.