International Trade MCQ 2

Study Notes

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 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.

An economy that engages in international trade, involving the import and export of goods and services.

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.

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.