4.1.3 Patterns of trade

    Cards (34)

    • Patterns of trade refer to the structured ways countries exchange goods and services internationally
    • Factor endowments include natural resources, labor force, and capital
    • Comparative advantage means producing goods at lower opportunity costs.
    • Match the factor influencing trade patterns with its example:
      Factor Endowments ↔️ Saudi Arabia exports oil
      Comparative Advantage ↔️ Vietnam produces textiles
      Government Policies ↔️ EU trade agreements
      Consumer Preferences ↔️ Demand for organic foods
    • China's dominance in manufacturing is due to its labor-intensive production
    • What are the six key factors influencing trade patterns?
      Factor endowments, comparative advantage, government policies, technology, consumer preferences, global events
    • Vietnam excels in textile production because of its lower labor costs
    • The European Union's trade agreements facilitate seamless trade within the region.
    • What technological advancement drives South Korea's semiconductor exports?
      Innovation in productivity
    • The rising demand for organic foods has increased their international trade
    • The COVID-19 pandemic disrupted supply chains and trade volumes globally.
    • Arrange the positive impacts of trade on economic development:
      1️⃣ Increased Productivity
      2️⃣ Job Creation
      3️⃣ Technological Transfer
      4️⃣ Higher Incomes
    • What formula represents the relationship between output, labor, and capital in trade specialization?
      Q = f(L, K)</latex>
    • International trade fosters the exchange of technology and knowledge
    • Trade liberalization can exacerbate income inequality if benefits are concentrated in certain sectors.
    • What environmental issue may result from increased production for exports?
      Environmental degradation
    • China's manufacturing dominance is due to its labor-intensive production
    • Match the factor influencing trade patterns with its example:
      Factor Endowments ↔️ Saudi Arabia exports oil
      Government Policies ↔️ EU trade agreements
      Consumer Preferences ↔️ Demand for organic foods
    • What principle states that nations should specialize in producing goods with lower opportunity costs?
      Comparative Advantage
    • Global events, such as the COVID-19 pandemic, can disrupt trade by affecting supply chains
    • Trade patterns are influenced by a variety of factors, including technology, consumer preferences, and global events.
    • What are three primary components of factor endowments that influence trade patterns?
      Natural resources, labor, capital
    • Government policies such as tariffs and trade agreements can influence trade flows and competitiveness
    • Factors influencing trade patterns in order of their relevance to the material
      1️⃣ Factor Endowments
      2️⃣ Comparative Advantage
      3️⃣ Government Policies
      4️⃣ Technology
      5️⃣ Consumer Preferences
      6️⃣ Global Events
    • What does the variable KK represent in the formula Q=Q =f(L,K) f(L, K)?

      Capital
    • International trade facilitates the exchange of technology and knowledge between countries.
    • Increased production for exports can lead to environmental degradation, such as deforestation in the Amazon
    • What is the primary purpose of regional trade agreements (RTAs)?
      Reduce trade barriers
    • What is the term for the shift in trade from non-member countries to less efficient member countries due to RTAs?
      Trade Diversion
    • Regional trade agreements encourage member countries to specialize in producing goods and services, increasing efficiency.
    • The North American Free Trade Agreement (NAFTA) includes the US, Canada, and Mexico
    • Match the international organization with its primary role:
      World Trade Organization (WTO) ↔️ Sets rules for global trade
      International Monetary Fund (IMF) ↔️ Provides financial support
      World Bank ↔️ Funds development projects
    • What is one positive impact of WTO's free trade agreements on trade patterns?
      Reduces trade barriers
    • IMF's austerity measures have been criticized for their negative impact on local economies
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