Question details

GMS 522 Chapter 2 International Trade Policy
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  • Allows countries to specialize in the production of those products they are best suited to producing
  • Specialization promotes greater efficiency and productivity (contributes to economic growth)
  • Consumers have access to have wider range of product
  • Source of tax revenue for governments

 

Exports: good manufactured in home country and sold in foreign country

Imports: produced in foreign country bought by home country

 

Mercantilism

  • Economic was viewed as a zero sum game
  • Stimulate exports and curtail imports in order to produce a positive balance of trade
  • Subsidized exports, high tariff imports
  • Labour was most significant factor, low labour costs translated into increased competitiveness in export markers
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