OCR A-Level Geography H481
Coastal Landscapes
Glaciated Landscapes
Dryland Landscapes
Earth’s Life Support Systems
Changing Spaces; Making Places
Trade in the Contemporary World
Global Migration
Human Rights
Power and Borders
Climate Change
Disease Dilemmas
Exploring Oceans
Future of Food
Hazardous Earth
Geographical Skills
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.
The 12 subtopics
Each one has its own page.
- Merchandise, services and capital flowsRecall questions on merchandise, services and capital as components of trade, visible and invisible trade, foreign direct and portfolio investment, remittances, the balance of trade with a worked deficit calculation, services surpluses, and the terms of trade.Open →
- Global trade patterns: inter-regional and intra-regional flowsRecall questions on inter-regional and intra-regional trade, Europe's high intra-regional share, China and the United States as the largest exporter and importer, East Asia to North America flows, the triad, distance and the gravity model, oil flows, seaborne trade, Asian supply chains, and Africa's small share of exports.Open →
- Trade, export value and human developmentRecall questions on the Human Development Index and its dimensions, the link between export value and human development, why export earnings may not raise development, as in Equatorial Guinea, commodity dependence, the Prebisch–Singer hypothesis, and trade openness with a worked calculation.Open →
- Trade as a driver of growth, stability and developmentRecall questions on comparative advantage and David Ricardo, specialisation, lower consumer prices, the multiplier effect of export industries, technology transfer, remittances, trade and political stability through the European Coal and Steel Community, export earnings, export processing zones, the spread of ideas, and global trade rules.Open →
- Trade inequalities, conflict and injusticeRecall questions on the core–periphery model and dependency theory, tariff escalation, commodity price volatility, the race to the bottom and the Rana Plaza collapse, conflict minerals and cobalt in the Democratic Republic of the Congo, land grabbing, export crops and food insecurity, carbon leakage, trade rules, Fairtrade, and resource booms.Open →
- Transport, technology and the global supply chainRecall questions on global supply chains, containerisation, TEUs and economies of scale in shipping, East Asian container ports, submarine cables and air freight, just-in-time production and its risks, the 2021 blockage of the Suez Canal, tradeable services, and why supply chains have lengthened.Open →
- Multinationals, outsourcing and the new international division of labourRecall questions on multinational corporations, outsourcing and offshoring, why firms locate in emerging economies, the benefits and drawbacks for host countries, transfer pricing, the new international division of labour and the smile curve, call centres in India and the Philippines, labour mobility, the brain drain, the kafala system, and reshoring.Open →
- Regional trading blocs and the European UnionRecall questions on trading blocs, free trade areas, customs unions, common markets and economic unions, the four freedoms of the European single market, trade creation and diversion, ASEAN, Mercosur and the USMCA that replaced NAFTA, the African Continental Free Trade Area, and low trade between African countries.Open →
- South–south trade and the growth of traded servicesRecall questions on the growth and share of south–south trade, China as Africa's largest trading partner and the composition of that trade, the Belt and Road Initiative and its critics, the advantages and inequalities of south–south trade, and the share, types and development benefits of traded services, including tourism.Open →
- India: trade patterns of an emerging economyRecall questions on India as an emerging economy, its main export markets and import sources, merchandise and IT service exports, its goods deficit and remittances, the 1991 liberalisation and its changing export mix, Bengaluru, generic medicines, environmental and political interdependence, withdrawal from RCEP, and the economic and social effects of trade-led growth.Open →
- The United States: a core economy shaping world tradeRecall questions on the United States as a core economy, its main trading partners, exports and imports, its persistent goods deficit and services surplus, the dollar as reserve currency, the World Trade Organization and blocked dispute settlement, tariffs on China, bilateral deals, agricultural subsidies, and the challenges and opportunities of its trade position.Open →
- Ethiopia: trade on the periphery of the global systemRecall questions on Ethiopia as a low income developing country, coffee, gold, oilseeds and cut flowers, its trading partners, dependence on coffee and the value added abroad, being landlocked and reliant on Djibouti, its weak negotiating position and WTO status, AGOA and its loss, instability, Ethiopian Airlines, the Hawassa industrial park, and the Grand Ethiopian Renaissance Dam.Open →
What you need to know
Answer each one before you reveal it.
Explain how specialisation between countries raises total world output.
What are conflict minerals?
Explain how the dollar's role as the world's reserve currency gives the United States trading power.
Why is Ethiopia classed as a low income developing country?
Explain why processing more of its coffee before export would benefit Ethiopia, and what makes it hard to do.
What is meant by merchandise trade?
What does the Human Development Index measure?
How did containerisation change international trade?
What is a multinational corporation?
What is a regional trading bloc?
What is meant by south–south trade?
Name India's largest single export market.
Define the term services in the context of international trade.
What is meant by inter-regional trade?
State the range of possible Human Development Index values.
Which economist first set out the theory of comparative advantage?
Which theory argues that poorer countries stay poor because trade drains their wealth towards richer ones?
In which decade did container shipping begin?
Explain how a multinational's arrival can create a local multiplier effect.
What feature does a customs union have that a free trade area does not?
Explain why south–south trade has grown so rapidly this century.
Which country is India's largest source of imports?
Name the three largest trading partners of the United States.
What does capital refer to as a component of international trade?
Define intra-regional trade.
Name the three dimensions combined in the Human Development Index.
How does international trade lower prices for consumers?
What is tariff escalation, and why does it damage developing countries?
What does TEU stand for in shipping?
Give two disadvantages for a country that becomes heavily dependent on foreign firms.
Describe what a common market allows beyond a customs union.
Since when has China been Africa's largest single trading partner?
Describe the main components of India's merchandise exports.
Describe the main components of United States merchandise exports.
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
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
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
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
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
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
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.
What is inside Levo
Six ways to work the same material.
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.
Every question in Trade in the Contemporary World, on a schedule.
Attempt a question from memory, write the correct version, then attempt it again. Levo records the jump between your first attempt and your last, and brings each question back on the day you are due to forget it.
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