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Economics 4.1.3
Economics- Edexcel 4.1.3
| Term | Definition |
|---|---|
| geographical pattern of trade | countries with whom businesses and people trade |
| intraregional trade | trade between countries in the same region |
| gravity theory of trade | an economy will gravitate towards trading with its closest neighbours and economies which are similar in terms of size, cultural preferences and stage of development |
| factors behind the gravity theory of trade | businesses trade more in markets close in geographical proximity & with a big market size/shared borders/shared language & single currency/similar consumer preferences |
| commodity pattern of trade | type of products that are traded internationally |
| less economically developed countries rely heavily on what types of exports? | primary product exports |
| examples of countries with high levels of primary product dependence | Angola, Ethiopia, Zambia, Kenya |
| stages of development for developing countries | change the pattern of trade: nation develops increasing complexity and more capabilities to trade often stimulated by development of comparative advantage |
| investment into what is required for a more diverse pattern of trade? | investment in human and physical capital |
| factors affecting comparative advantage | natural resources/unit wage costs/infrastructure/non-price factors/import controls/exchange rate/non-price competitiveness |
| emergincg economy | an economy that can’t yet be classified as ‘developed’ and is investing in its productive capacity |
| CIVETS | colombia, indonesia, vietnam, egypt, turkey, south africa |
| BRICs | brazil, russia, india, china |
| MINT | mexico, indonesia, nigeria, turkey |
| how do emerging economies impact trade patterns? | purchase more due to rising income/attract MNC activity/sell more medium to high value exports/currency volatility in markets impact commodity prices/rising tension results in trade wars |
| trade bloc | consists of several countries that agree to trade with each other with reduced or no trade barriers |
| 3 varying degrees of integration and types of trade bloc | preferential trade area/free trade area/customs union |
| preferential trade area | where there is reduced protectionism on a few select goods/services amongst the countries involved |
| bilateral trade agreement | preferential trade area between just 2 countries |
| free trade area | completely free trade between the countries involved but each country can set their own trade restrictions on countries outside of the agreement |
| customs union | there is completely free trade between the countries involved and they all agree to impose the same trade restrictions on other countries as each other |
| intra-regional trade | within the trade bloc itself |
| inter-regional trade | trade between region / blocs |
| trade creation | occurs when countries agree a trade deal that lowers tariffs between them |
| trade diversion | trade is diverted from a more efficient exporter towards a less efficient one by the formation of a free trade agreement or a customs union |
| more trading blocs lead to | more intra-regional trade, less inter-regional trade, more trade creation, less trade diversion |
Created by:
jessharris
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