Economics: International and National Trade

Play an AI-generated podcast conversation about this lesson

What is the significance of trade in obtaining commodities that a country cannot produce itself?

Countries need to trade to obtain commodities they cannot produce themselves or purchase elsewhere at a lower price.

What is the primary difference between international and national trade?

International trade is the exchange of goods and services among countries across national boundaries, whereas national trade occurs within a country's borders.

What was the primary limitation of the barter system in primitive societies?

The primary limitation of the barter system was the need for a 'double coincidence of wants', where two parties had to have what the other wanted.

What is the significance of Jon Beel Mela in the context of the barter system?

Jon Beel Mela is possibly the only fair in India where the barter system is still alive, with people from various tribes and communities exchanging their products. Signup and view all the answers

What is the primary benefit of trade for both parties involved?

Trade is mutually beneficial for both parties involved. Signup and view all the answers

What was the outcome of the introduction of money in the trade system?

The introduction of money overcame the difficulties of the barter system. Signup and view all the answers

What is the primary reason for the uneven distribution of national resources across the world?

Differences in physical make-up, such as geology, relief, soil, and climate. Signup and view all the answers

How does the size of a country's population affect its trade?

Densely populated countries have large internal trade but little external trade, as most production is consumed locally. Signup and view all the answers

What is the significance of the stage of economic development in international trade?

It determines the nature of traded items, with agricultural countries trading agro products and industrialized nations trading machinery and finished products. Signup and view all the answers

How does foreign investment impact trade in developing countries?

It boosts trade by developing capital-intensive industries, leading to the import of foodstuffs, minerals, and creating markets for finished products. Signup and view all the answers

What role has transportation played in the expansion of international trade?

Improved transportation has enabled the trade of goods over long distances, contributing to spatial expansion. Signup and view all the answers

What is the significance of geological structure in international trade?

It determines the mineral resource base and influences the diversity of crops and animals raised. Signup and view all the answers

How does climate influence international trade?

It determines the type of flora and fauna that can survive in a region, leading to diversity in products traded. Signup and view all the answers

What is the implication of a negative balance of trade on a country's economy?

It means the country spends more on imports than it earns from exports, leading to exhaustion of financial reserves. Signup and view all the answers

What is bilateral trade, and how does it work?

Bilateral trade is done between two countries, where they agree to trade specified commodities, and may involve agreements to purchase specific items. Signup and view all the answers

What is the significance of the balance of trade in a country's economy?

It records the volume of goods and services imported and exported, and has implications for a country's financial reserves and economy. Signup and view all the answers

What type of ports serve as collection centers for goods from different countries for export?

Entrepot Ports Signup and view all the answers

What is the primary characteristic of a pair of ferry stations?

They face each other across a water body Signup and view all the answers

Which type of ports have only strategic importance and serve warships?

Naval Ports Signup and view all the answers

What is the primary benefit of nations forming trading blocs?

They gain benefits through increased trade and cooperation Signup and view all the answers

How do ports facilitate international trade?

By providing a location for the exchange of goods and services between countries Signup and view all the answers

What is the primary consequence of a nation having a negative balance of payments?

It is detrimental to the nation's economy Signup and view all the answers

What was the origin of the word 'salary' and how did it become a mode of payment?

The word 'salary' comes from the Latin word 'Salarium' which means payment by salt. In ancient times, producing salt from seawater was unknown and could only be made from rock salt, which was rare and expensive, making it a valuable commodity for payment. Signup and view all the answers

What were some of the rare objects used as money in the olden times?

Some of the rare objects used as money in the olden times were flintstones, obsidian, cowrie shells, tiger's paws, whale's teeth, dogs' teeth, skins, furs, cattle, rice, peppercorns, salt, small tools, copper, silver, and gold. Signup and view all the answers

What was the Silk Route and what commodities were traded along it?

The Silk Route was an ancient example of long-distance trade connecting Rome to China, and it involved the trade of Chinese silk, Roman wool, precious metals, and other high-value commodities from intermediate points in India, Persia, and Central Asia. Signup and view all the answers

How did the Industrial Revolution impact the trade of raw materials and manufactured goods?

The Industrial Revolution led to an increase in demand for raw materials like grains, meat, and wool, but their monetary value declined in relation to the manufactured goods, with industrialized nations importing primary products as raw materials and exporting the value-added finished products back to non-industrialized nations. Signup and view all the answers

What were some of the consequences of the slave trade, and when was it abolished in different countries?

The slave trade resulted in the forced transportation of African natives to the Americas, leading to the separation of family members and the exploitation of their labor. The slave trade was abolished in Denmark in 1792, Great Britain in 1807, and the United States in 1808. Signup and view all the answers

What was the impact of the World Wars on international trade, and what organization helped in reducing trade barriers?

During the World Wars I and II, countries imposed trade taxes and quantitative restrictions, but the post-war period saw the establishment of organizations like the General Agreement for Tariffs and Trade (GATT), which later became the World Trade Organization (WTO), helping to reduce tariff barriers. Signup and view all the answers

What is the principle of comparative advantage, and how does it relate to international trade?

The principle of comparative advantage states that countries should specialize in producing goods and services in which they have a lower opportunity cost, leading to mutually beneficial trade between countries. Signup and view all the answers

What is the significance of specialization in production, and how does it lead to international trade?

Specialization in production leads to international trade as countries produce goods and services in which they have a comparative advantage, leading to trade between countries that benefit from each other's specialization. Signup and view all the answers

What is the significance of transportation and communication systems in modern international trade?

Well-developed transportation and communication systems are essential for modern international trade, as they facilitate the movement of goods and services across borders and enable countries to participate in global trade. Signup and view all the answers

What is the relationship between international trade and foreign policy in modern times?

International trade is closely related to the foreign policy of nations, as trade agreements and relationships with other countries are a key aspect of a country's foreign policy. Signup and view all the answers

What is the main objective of General Agreement for Tariffs and Trade (GATT) formed in 1948?

To liberalise the world from high customs tariffs and various other types of restrictions Signup and view all the answers

What is the term for granting a special status to some trading partners, allowing them to trade with a country on preferential terms?

Most Favoured Nation (MFN) Signup and view all the answers

What is the practice of selling a commodity in two countries at a price that differs for reasons not related to costs?

Dumping Signup and view all the answers

What is the main function of the World Trade Organisation (WTO) with regards to trade disputes?

Resolving disputes between its member nations Signup and view all the answers

What is the criticism of the World Trade Organisation (WTO) by those who are worried about the effects of free trade and economic globalisation?

Free trade does not make ordinary people’s lives more prosperous, instead it widens the gulf between rich and poor Signup and view all the answers

What percentage of world trade is generated by regional trade blocs today?

52 per cent Signup and view all the answers

What is the main advantage of regional trade blocs in terms of trade restrictions?

Removing trade tariffs within the member nations Signup and view all the answers

What is the benefit of international trade in terms of production and standard of living?

Higher level of production and better standard of living Signup and view all the answers

What is the potential concern of free trade and economic globalisation on the environment?

Issues of health, worker’s rights, child labour, and environment are ignored Signup and view all the answers

What is the number of member countries in the World Trade Organisation (WTO) as of December 2016?

164 countries Signup and view all the answers

What are the consequences of countries competing to trade more, and how does it affect the environment and natural resources?

It leads to the overuse of natural resources, depletion of marine life, and pollution, as production and consumption increase without sustainable development practices. Signup and view all the answers

How do multinational corporations contribute to environmental degradation and health concerns, and what are the implications of their profit-oriented approach?

They expand their operations without adhering to sustainable development norms, leading to pollution, environmental degradation, and health concerns, which can have severe implications in the future if not addressed. Signup and view all the answers

What are the criteria used to judge the importance of a port, and what does it indicate about the development of its hinterland?

The importance of a port is judged by the size of cargo and the number of ships handled, which indicates the level of development of its hinterland. Signup and view all the answers

What are the different types of ports classified according to the traffic they handle, and what are their characteristics?

Ports are classified into industrial ports (handling bulk cargo), commercial ports (handling general cargo and passenger traffic), and comprehensive ports (handling both bulk and general cargo in large volumes). Signup and view all the answers

What are inland ports, and how do they differ from out ports in terms of their location and function?

Inland ports are located away from the sea coast, connected to the sea through a river or canal, while out ports are deep-water ports built away from the actual ports to serve larger ships. Signup and view all the answers

What are oil ports, and how do they differ from other types of ports in terms of their specialized functions?

Oil ports are specialized ports that deal with the processing and shipping of oil, and can be further classified into tanker ports and refinery ports. Signup and view all the answers

What are ports of call, and how did they evolve into commercial ports over time?

Ports of call were originally developed as stopping points on main sea routes for refuelling, watering, and provisioning, and later evolved into commercial ports. Signup and view all the answers

What are the implications of international trade on the environment, health, and well-being of people around the world?

International trade can have far-reaching consequences on the environment, health, and well-being of people, including pollution, depletion of natural resources, and exploitation. Signup and view all the answers

How do the activities of multinational corporations affect the environment and health, and what are the consequences of their profit-oriented approach?

The activities of multinational corporations can lead to environmental degradation, pollution, and health concerns, as they prioritize profits over sustainable development and environmental responsibility. Signup and view all the answers

What are the consequences of countries depending on international trade, and how can it lead to uneven levels of development and commercial rivalry?

Dependence on international trade can lead to uneven levels of development, exploitation, and commercial rivalry, potentially resulting in conflict and war. Signup and view all the answers