Economics Notes: International Trade and Globalisation
1. Benefits of International Trade
Access to more goods and services
Economies of scale
Increased competition
Greater consumer choice
Specialisation and efficiency
2. Absolute and Comparative Advantage
Absolute Advantage: Ability to produce more with the same resources
Comparative Advantage: Ability to produce at lower opportunity cost
Basis for trade and specialisation
3. Free Trade vs Protectionism
Free Trade: No restrictions on imports/exports
Protectionism: Use of barriers like:
oTariffs
oQuotas
oSubsidies
oNon-tariff barriers (e.g., regulations)
4. Globalisation
Increasing interconnectedness of economies
Driven by technology, trade liberalisation, MNCs
Benefits: growth, efficiency, innovation
Challenges: inequality, exploitation, environmental impact
5. Balance of Payments
Records all economic transactions with the rest of the world
