Questions and Answers
What type of goods are involved in visible exports?
Which of the following is an example of an invisible export?
What characterizes an open economy?
Which of the following is an example of a visible import?
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What happens to money in the Irish economy when there are visible exports?
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What is one of the ways international trade can promote economic growth?
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What is a disadvantage of international trade related to the environment?
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Why may developing countries be vulnerable in international trade?
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What is an advantage of international trade for consumers?
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What is a potential drawback of international trade for an economy?
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Study Notes
Exports and Imports
- Visible Exports: Physical goods that leave Ireland, resulting in money entering the Irish economy (e.g. Irish beef).
- Visible Imports: Physical goods that enter Ireland, resulting in money leaving the Irish economy (e.g. imported cars).
Invisible Trade
- Invisible Exports: Services provided to Irish people and foreign countries, resulting in money entering the Irish economy.
- Invisible Imports: Services provided to Irish people, resulting in money leaving the Irish economy and entering foreign economies.
Open Economy
- An economy that engages in international trade, involving the import and export of goods and services.
Implications of International Trade
- International trade contributes to economic growth by injecting money into the economy through the export of goods and services.
- It also leads to an increase in employment opportunities both directly and indirectly.
- Economies of scale are achieved as companies can produce more at a lower cost, leading to increased efficiency and competitiveness.
- Governments benefit from international trade through fiscal policy, generating revenue from taxes and tariffs.
Disadvantages of International Trade
- Leakage of money from the economy occurs through imports, reducing the multiplier effect of domestic spending.
- International trade leads to increased pollution and carbon emissions due to the transportation of goods and services.
- Over dependence on foreign markets can lead to neglect of domestic markets, hindering local economic growth.
- Developing countries are vulnerable to the negative effects of international trade, such as exploitation and unequal trade agreements.
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Description
Learn about visible and invisible exports and imports in Ireland, including physical goods and services that affect the Irish economy.