Economics 2.2.5 Word Scramble
|
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
| Question | Answer |
| exports | goods and services sold from country to another |
| X | exports |
| money from sale of exports | injection into the circular flow of income |
| factors affecting the demand for a nation’s exports | relative prices of exports in world markets/external value of exchange rate/non-price demand factors/strength of AD in key export markets/level of protectionism |
| why does relative prices of exports in world markets impact demand for a nation’s exports? | a country with a relatively high rate of inflation will have lower exports due to a loss of cost and price competitiveness in international markets |
| what is the relative price of exports in world markets affected by? | domestic inflation, shipping/transport costs, fluctuations in world commodity prices |
| why does external value of exchange rate impact demand for a nation’s exports? | stronger currency makes exports more expensive and imports cheaper/weaker currency makes exports cheaper and imports more expensive |
| why does non-price factors impact demand for a nation’s exports? | specific to factors which can be design, branding, product quality, after-sales service |
| why does strength of AD in key export markets impact demand for a nation’s exports? | state of the world economy can lead to global recession which hits export sales for many countries, if key export markets are booming then there is a higher demand for exports |
| why does level of protectionism impact demand for a nation’s exports? | tariffs(tax on imports), quotas(physical limit on number of imports into country), other trade restrictions e.g. restrictions on product quality |
| trade surplus | X>M so aggregate demand increases |
| trade deficit | M>X so aggregate demand falls |
| trade balance is zero | X=M so external trade has a neutral effect on AD |
Created by:
jessharris
Popular Economics sets