Flashcards · 0715 · Topic 3

Globalisation of trade flashcards

13 cards on Topic 3, subtopics 3.1 to 3.2. Pick a subtopic or study them all.

Study mode needs JavaScript. Every card is listed below, so you can still cover the answers and test yourself.

All 13 cards

For a quick read-through or printing. Cover the right-hand side to test yourself.

What are the benefits of international trade to a country?: Wider choice of goods, a higher standard of living, cheaper imports where other countries produce at lower cost, more investment and job creation.
What challenges do exporters and importers face?: Distance and language, methods of payment and documentation, transport and customs duties, risk of non-payment, exchange-rate risk, competition and different legal systems.
Visible vs invisible trade: Visible trade: trade in goods. Invisible trade: trade in services, such as tourism, banking, insurance and shipping.
Balance of trade vs balance of payments: Balance of trade: exports minus imports of goods only. Balance of payments: trade in goods and services, plus financial flows such as investment.
A country exports goods worth $850m and imports goods worth $920m. What is its balance of trade?: $850m − $920m = −$70m, a deficit of $70m.
Tariff vs quota vs embargo: Tariff: a tax on imports, raising their price. Quota: a limit on the quantity imported. Embargo: a ban on trade in a good or with a country.
What are the advantages and disadvantages of a trading bloc for members?: Advantages: easier access to members’ markets, often with no internal tariffs. Disadvantages: loss of an independent trade policy and exposure to the bloc’s economic problems.

Simple vs complex supply chain: Simple: supplier → manufacturer → consumer. Complex: supplier → agent → wholesaler → retailer → consumer.
Upstream vs downstream in a supply chain: Upstream: suppliers and raw materials coming into the enterprise. Downstream: distribution from the enterprise to the end consumer.
Why do businesses manage global supply chains?: Lower costs of production, labour and purchasing, helped by advances in logistics and communication.
What are the six named types of global supply chain risk?: Environmental, natural disaster, financial, ethical, technological and political.
A new tariff is imposed in a supplier’s country. Which type of supply chain risk is this?: Political risk, because it comes from a change in government policy.
Why is risk assessment important in a global supply chain?: Identifying risks and planning for them in advance, for example by using several suppliers, reduces disruption when something goes wrong.