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Trade in the Contemporary World

  • 12 subtopics
  • 36 things to know
  • Component 02

What Trade in the Contemporary World covers

Trade in the Contemporary World is examined in Component 02, Human interactions. It covers merchandise, services and capital flows and the global pattern of trade within and between regions; the link between export value and human development; trade as a driver of growth, stability and development, and as a source of inequality, conflict and injustice; transport, technology and global supply chains; multinationals, outsourcing and the new international division of labour; regional trading blocs and the European Union; and south–south trade and the growth of traded services. It also covers three contrasting countries: India, an emerging economy; the United States, a core economy shaping world trade; and Ethiopia, trading on the periphery of the global system.

Where it is assessed

Component 02

Human interactions.

Check the OCR specification ↗

The 12 subtopics

Each one has its own page.

What you need to know

Answer each one before you reveal it.

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Key term

Explain why intra-regional trade within Asia has grown so quickly.

Key term

Explain how specialisation between countries raises total world output.

Key term

What are conflict minerals?

Key term

Explain how the dollar's role as the world's reserve currency gives the United States trading power.

Key term

Why is Ethiopia classed as a low income developing country?

Process

Explain why processing more of its coffee before export would benefit Ethiopia, and what makes it hard to do.

Key term

What is meant by merchandise trade?

Key term

What does the Human Development Index measure?

Key term

How did containerisation change international trade?

Key term

What is a multinational corporation?

Key term

What is a regional trading bloc?

Key term

What is meant by south–south trade?

Key term

Name India's largest single export market.

Key term

Define the term services in the context of international trade.

Key term

What is meant by inter-regional trade?

Key term

State the range of possible Human Development Index values.

Evaluation

Which economist first set out the theory of comparative advantage?

Key term

Which theory argues that poorer countries stay poor because trade drains their wealth towards richer ones?

Numbers

In which decade did container shipping begin?

Key term

Explain how a multinational's arrival can create a local multiplier effect.

Key term

What feature does a customs union have that a free trade area does not?

Key term

Explain why south–south trade has grown so rapidly this century.

Key term

Which country is India's largest source of imports?

Key term

Name the three largest trading partners of the United States.

Key term

What does capital refer to as a component of international trade?

Key term

Define intra-regional trade.

Key term

Name the three dimensions combined in the Human Development Index.

Key term

How does international trade lower prices for consumers?

Key term

What is tariff escalation, and why does it damage developing countries?

Key term

What does TEU stand for in shipping?

Evaluation

Give two disadvantages for a country that becomes heavily dependent on foreign firms.

Key term

Describe what a common market allows beyond a customs union.

Numbers

Since when has China been Africa's largest single trading partner?

Key term

Describe the main components of India's merchandise exports.

Key term

Describe the main components of United States merchandise exports.

Key term

Which crop is Ethiopia's leading export earner?

Take Trade in the Contemporary World further

The same content, four other ways.

Commonly confused

Pairs that lose marks when they are blurred together.

  • Merchandise trade vs Services trade

    Merchandise trade: the international exchange of tangible physical goods such as food, fuels, raw materials and manufactured products, which are counted as they clear customs. Services trade: Cross-border sales of intangible products such as banking, insurance, tourism and transport, which never pass through customs and have to be estimated rather than counted.

  • Foreign direct investment vs Portfolio investment

    Foreign direct investment: buying, building or taking a lasting controlling stake in a productive business or asset in another country. Portfolio investment: Buying shares and bonds abroad without taking control, money that can be pulled out again almost overnight.

  • Outsourcing vs Offshoring

    Outsourcing: handing part of a firm's work to a separate company rather than doing it in-house, which changes who carries the work out. Offshoring: Moving an activity to another country while keeping it inside the same firm, which changes only where the work is done.

Questions from this topic

Each one with the model answer underneath.

  1. 1

    What is meant by merchandise trade?

    Model answer

    Merchandise trade is the international exchange of tangible, physical goods such as food, fuels, raw materials and manufactured products.

  2. 2

    Define the term services in the context of international trade.

    Model answer

    Services are intangible products sold across borders, such as banking, insurance, tourism, transport, education and information technology work.

  3. 3

    What does capital refer to as a component of international trade?

    Model answer

    Capital refers to flows of money between countries, including foreign direct investment, portfolio investment, bank loans, aid and remittances.

  4. 4

    Why are service exports harder to measure than merchandise exports?

    Model answer

    Services are intangible and cross borders without passing through customs, so they are never physically counted and have to be estimated from company accounts and balance of payments records.

  5. 5

    Distinguish between visible and invisible trade.

    Model answer

    Visible trade is trade in physical goods, while invisible trade is trade in services and other intangible earnings such as interest and profits.

  6. 6

    What is foreign direct investment?

    Model answer

    Foreign direct investment is when a firm based in one country buys, builds or takes a lasting controlling stake in a business or asset in another country.

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Trade in the Contemporary World revision questions

What does Trade in the Contemporary World cover in OCR A-Level Geography?
12 subtopics: merchandise, services and capital flows, global trade patterns: inter-regional and intra-regional flows, trade, export value and human development, trade as a driver of growth, stability and development, trade inequalities, conflict and injustice, transport, technology and the global supply chain, multinationals, outsourcing and the new international division of labour, regional trading blocs and the european union, south–south trade and the growth of traded services, india: trade patterns of an emerging economy, the united states: a core economy shaping world trade and ethiopia: trade on the periphery of the global system. Each one has its own page with questions and model answers.
How is Trade in the Contemporary World organised?
By the OCR H481 specification, subtopic by subtopic, so it matches the order you are taught it in.

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