4.1.2

• What is the definition of international trade?

  International trade allows countries to specialize in producing goods they are more efficient at and trade for other goods.
• What is the concept known as comparative advantage?

  Comparative advantage is the ability of a country to produce goods more efficiently than others.
• What are the benefits of international trade?

  • Increased efficiency
  • Greater output for both countries
  • Provides a competitive advantage by focusing on what a country or business does best
• What economic factor can make foreign goods cheaper?

  A strong domestic currency can make foreign goods cheaper.
• Why do countries like China excel in producing low-cost goods?

  Countries like China have a high manufacturing capacity.
• What agricultural products are mentioned as needing imports in the UK?

  Bananas and coffee are examples of products that cannot be grown in the UK.
• What is one reason for international trade related to trade barriers?

  No trade barriers with certain regions can facilitate international trade.
• What is the definition of Foreign Direct Investment (FDI)?

  FDI is investment by setting up operations or acquiring assets in another country.
• How does the UN define FDI?

  The UN defines FDI as taking a 10% or more stake in a foreign business.
• What are the advantages of Foreign Direct Investment (FDI)?

  • More control over operations
  • Closer proximity to customers
  • Reduced transportation costs and avoidance of trade barriers
• What are the disadvantages of Foreign Direct Investment (FDI)?

  • Expensive and complex
  • High risk involved in setting up in a foreign market
• What is a reason for businesses to expand abroad?

  Domestic markets are saturated.
• Why might businesses seek growth opportunities in foreign countries?

  Growth opportunities exist in countries with large populations and rising incomes.
• Who are the UK’s key trading partners for imports and exports?

  • Imports: Mainly from the EU and countries like China
  • Exports: Predominantly to the EU, the USA, and other advanced economies
• How do platforms like eBay impact global trade?

  eBay reduces the barriers of distance, enabling buyers and sellers across the world to trade.
• What is one impact of e-commerce platforms on developing countries?

  1. commerce platforms can integrate sellers from remote or unstable regions into the global economy.
• What are the roles of e-commerce platforms in global trade?

  • Overcome trust issues
  • Facilitate global trade
  • Provide new development opportunities