International Trade and Economics Concepts

The study of the way in which we use our scarce resources to satisfy our unlimited wants.

An open economy is one where a country trades with two or more countries to diversify their market.

<p>Multi-national corporations.</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>If Australia and New Zealand are trading, and New Zealand is profiting, the zero-sum game suggests that Australia would be losing (not profiting).</p> Signup and view all the answers

<p>Mercantilism led to government policies that encouraged exports and discouraged imports.</p> Signup and view all the answers

<p>If countries are only exporting, and no countries are importing, then no profit will be made as no country will accept any imports.</p> Signup and view all the answers

<p>Consumers.</p> Signup and view all the answers

<p>Producers selling products that cannot compete in the global market.</p> Signup and view all the answers

<p>International trade is important to Australia because they do not have enough diverse resources to suffice. The challenges for Australia in the current global trading environment include increased interest rates, increased inflation rates, and COVID prevented the manufacturing of goods and services.</p> Signup and view all the answers

<p>Crude petroleum.</p> Signup and view all the answers

<p>Gold.</p> Signup and view all the answers

<p>China.</p> Signup and view all the answers

<p>Germany.</p> Signup and view all the answers

<p>A production possibility curve (PPC) is a graphical method of showing a nation's alternative maximum output combinations.</p> Signup and view all the answers

<p>We assume that these are the only commodities produced and that the stock available resources is fixed.</p> Signup and view all the answers

<p>Absolute advantage can be defined as when a nation is able to produce commodities more efficiently than another nation.</p> Signup and view all the answers

<ul> <li>There are only two countries. - Each country produces two goods. - Each country has the same quantity of resources, but the quality is different. - There are no transportation costs.</li> </ul> Signup and view all the answers

<p>Countries are &quot;better off&quot; by applying the principle of absolute advantage because of lower opportunity cost and higher profit margins. Nations or companies with a comparative advantage can focus their labor, capital, and resources on production that requires a lower opportunity cost and therefore achieve higher profit margins.</p> Signup and view all the answers

<p>Competitive advantage can be defined as trade advantage obtained through the capacity of a nation's industries to upgrade and innovate. Australian exporters gain a competitive advantage through digital trade innovation. Australia has strong competitive advantages in its skills, research base, and legal institutions, and high standards of living.</p> Signup and view all the answers

<p>Porter's Diamond is a model that emphasizes the competitive advantage of an industry or business that makes it work better than other competitions in a region or country.</p> Signup and view all the answers

<p>Firm strategy, structure &amp; rivalry.</p> Signup and view all the answers

<p>The global economy is more closely linked than ever before because societies and economies around the world are becoming more integrated. Integration is the result of reduced costs of transport, lower trade barriers, faster communication of ideas, etc.</p> Signup and view all the answers

<p>The growing integration of national economies to form a single interdependent global economy.</p> Signup and view all the answers

<p>The convergence of tastes and preferences across the markets of the world and global acceptance for standardized products.</p> Signup and view all the answers

<p>The dispersal of the phases of production around the world by a firm to take advantage of national differences in production efficiencies.</p> Signup and view all the answers

<p>Linkage between events in one economy and outcomes in another by cross borders, transactions, and international flows of trade, capital, and technology.</p> Signup and view all the answers

<p>A measure of economic integration based on the ratio of trade in brackets (the sum of exports plus imports) to output.</p> Signup and view all the answers

<p>A measure economic integration based on the theory that the prices of similar products traded in linked markets should converge to one price.</p> Signup and view all the answers

<p>The movement of money for the purpose of investment, trade, or business production.</p> Signup and view all the answers

<p>The sum of all transactions performed in the foreign exchange market during any specific time, although generally they are computed monthly.</p> Signup and view all the answers

<p>On the last day that the future contract can be delivered to fulfill the terms of the contract, the price of futures and the price of the underlying commodity will be equal.</p> Signup and view all the answers

<p>The flow of labor between markets due to international migration.</p> Signup and view all the answers

<p>An enterprise operating in several countries but managed from one home country. Generally, any company or group that drives a quarter of its revenue outside its home country is considered a multinational corporation.</p> Signup and view all the answers

<p>The system of organizations, people, activities, information, and resources involved in moving a product or service from supply to consumer.</p> Signup and view all the answers

<p>During the COVID-19 pandemic, people were in lockdown and therefore were using online shopping services more. Nike seeks to make as much profit as possible, therefore they source their clothes from China where labor costs are lower.</p> Signup and view all the answers

<p>Advances in technology.</p> Signup and view all the answers

<p>Dramatic improvement in transport and communication. Moving faster and cheaper movement of goods and services, people, and ideas.</p> Signup and view all the answers

<p>Less worldwide global conflict leads to more open trade.</p> Signup and view all the answers

<p>Many countries, including emerging economies, have moved from import-substitution to export-orientation as a development strategy, leading to more international business.</p> Signup and view all the answers

<p>Government restrictions on trade and investment are lowered. Trading regulations are reduced, making trade cheaper and more efficient.</p> Signup and view all the answers

<p>Developing economies become more a part of global trading systems. This leads to larger markets for imports and exports.</p> Signup and view all the answers

<p>Less rigid controls of the market to allow them to operate more freely.</p> Signup and view all the answers

<p>Comparative and competitive advantage theories will mean MNCs can locate different activities in different countries.</p> Signup and view all the answers

<p>Encourage trade and greater economic cooperation between member nations.</p> Signup and view all the answers

<p>Global organizations, such as the International Monetary Fund (IMF) and the World Bank, operate to foster greater international cooperation in trade, development, and finance.</p> Signup and view all the answers

<p>International trade is generally made through bills of exchange and bankers' drafts. A bill of exchange is an order drawn by a person upon a bank or another person, asking the latter to make certain payments to a third party.</p> Signup and view all the answers

<p>The value of the currency of one country expressed in terms of the currency of another country.</p> Signup and view all the answers

<p>An increase in the value of one currency relative to another.</p> Signup and view all the answers

<p>A decrease in the value of one currency relative to another currency.</p> Signup and view all the answers

<p>The buying (demand) and selling (supply) of currency is done by authorized currency dealers in the FOREX market.</p> Signup and view all the answers

<p>Price Australian consumers now pay for imports increases.</p> Signup and view all the answers

<p>Price of Australian exports relative to other countries decreases.</p> Signup and view all the answers

<p>A statistical concept that highlights the relationship between export prices and import prices.</p> Signup and view all the answers

<p>Terms of trade are important in international trade because they determine the economic gain accrued to a nation from trade.</p> Signup and view all the answers