Flashcards on Fundamentals of International Trade
Fundamentals of International Trade: A Student's Guide
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International Trade Concepts
83 cards
Card 1
Question: What is international trade?
Answer: The exchange of goods or services between countries; purchase and sale of goods and services by companies in different countries (not by countries the
Card 2
Question: Define imports and exports.
Answer: Imports: movement of goods and services from abroad into the economy. Exports: movement of goods and services from the economy to abroad.
Card 3
Question: What is visible trade versus invisible trade?
Answer: Visible trade refers to buying and selling of goods (tangible items). Invisible trade refers to services.
Card 4
Question: List the structural forces that shape international trade.
Answer: Economics (efficiency/comparative advantage), institutions (rules & agreements), geography (location & distance), technology (transport, communication
Card 5
Question: What is intra-industry trade?
Answer: Two-way trade in similar goods within the same sector (e.g., cars of similar class and price range); common in manufactured goods among developed nati
Card 6
Question: Give examples of goods typically involved in intra-industry trade.
Answer: Chemicals, machinery, transport equipment, electrical equipment, and electronics.
Card 7
Question: Differentiate horizontal and vertical intra-industry trade.
Answer: Horizontal trade: similar goods with differentiated features but similar quality/price (e.g., cars of same class). Vertical trade: trade in goods that
Card 8
Question: What is vertical specialization of production?
Answer: Trade in similar goods but at different stages of production across countries.
Card 9
Question: What are gains from trade mentioned in the content?
Answer: Better variety of products, specialized learning that fosters product development and innovation, skill development, and economies of scale (e.g., lar
Card 10
Question: How is intra-industry trade measured (one example given)?
Answer: Measured by indices such as the Grubel-Lloyd (GL) index.