MICROECONOMICS (9): International Trade

A limit on the quantity of imports.

Quota

A regional organization promoting economic cooperation in Southeast Asia.

Association of Southeast Asian Nations (ASEAN)

A tax on imported goods.

Tariff

Consumer goods, capital goods, commodities, and services.

Types of goods in international trade

Focusing on producing goods a country can make most efficiently.

Specialization

Give one advantage of international trade.

Lower Prices and Variety, Specialization and Efficiency, Economic Growth and Employment, Access to Resources, and International Relations

Give one disadvantage of international trade.

Environmental and Resource Exploitation, Cultural Erosion, Legal and Currency Discrepancies, and Increased Transportation Risks

How does international trade affect GDP?

It contributes significantly to a country's economic output.

How does trade increase competition?

Foreign firms enter markets, forcing local firms to improve.

It was an early trade network connecting regions and enabling exchange of goods and culture.

Silk Road

Name one major trading partner of the Philippines.

USA (also China or Japan).

Promotes global financial stability and supports international trade.

International Monetary Fund (IMF)

Provides loans and support for development projects.

World Bank Group

Regulates global trade rules and settles trade disputes.

World Trade Organization (WTO)

Relying heavily on imports, making a country vulnerable to disruptions.

Economic Dependency

The ability to produce a good at a lower marginal cost than another country.

Absolute Advantage

The ability to produce a good at a lower opportunity cost than another country.

Comparative Advantage

The exchange of goods, services, and capital across national borders.

International Trade

Trading goods directly without money.

Barter System

What drives international trade?

Differences in resources, technology, and efficiency.

What is the Philippines' main export?

Electronics (especially semiconductors).

When imports exceed exports.

Trade Deficit

Where is IMF located?

Washington, D.C., U.S..

Where is the ADB headquarter located?

Mandaluyong, Metro Manila, Philippines.

Who is the current managing director of IMF?

Kristalina Georgieva, a Bulgarian National

Who is the current President of ADB?

Masato Kanda, a Japanese National

Who is the current WBG President?

Ajay Banga, a Indian-American National

Why do countries engage in international trade?

To access resources they lack, specialize in production, and improve living standards.

Why do governments use protectionism?

To protect domestic industries from foreign competition.