levo

Trade in the Contemporary World

Trade as a driver of growth, stability and development

  • 3 things to know
  • Component 02

Overview

Recall 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.

What you need to know

Answer each one before you reveal it.

Your recallNot started
Key term

Explain how specialisation between countries raises total world output.

Evaluation

Which economist first set out the theory of comparative advantage?

Key term

How does international trade lower prices for consumers?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    What is comparative advantage?

    Model answer

    Comparative advantage is a country's ability to produce a good at a lower opportunity cost than another country, which is the basis of the gains from specialisation and trade.

  2. 2

    Which economist first set out the theory of comparative advantage?

    Model answer

    David Ricardo set out the theory of comparative advantage in the early nineteenth century.

  3. 3

    Explain how specialisation between countries raises total world output.

    Model answer

    Each country concentrates on what it produces relatively most efficiently, so the same resources yield more goods overall, and trade then lets every country consume beyond what it could produce alone.

  4. 4

    How does international trade lower prices for consumers?

    Model answer

    Competition from imports and access to lower-cost overseas producers push prices down while widening the range of goods available.

  5. 5

    What is the multiplier effect of an export industry?

    Model answer

    Money earned by exporters is respent on local wages, suppliers and services, so each unit of export income generates further rounds of spending, income and jobs in the local economy.

  6. 6

    Explain how trade transfers technology between countries.

    Model answer

    Foreign firms bring machinery, technical standards, management systems and training when they invest or subcontract, and local suppliers must adopt those methods to keep their contracts.

Other ways to work this

The same content, four other ways.

What is inside Levo

Six ways to work the same material.

1Closed book
2Open book
3Closed book

The 3-step method, run for you

Answer cold, learn it, then prove it stuck. Levo tracks the jump between your first attempt and your last.

Coastal Landscapes
Glaciated Landscapes
Dryland Landscapes
Earth’s Life Support Systems

Cram a whole paper in one sitting

Sort every topic into what you know and what you do not, then drill only the weak ones.

Hotter magma is .
runnierthickerslower

Blank Blitz makes facts automatic

Rapid timed gap-fills on the terms and numbers you need to recall without thinking.

AThe lower quartile is the 2nd value, 11 cm.
BThe upper quartile is the 6th value, 16 cm.
CThe interquartile range is 16 − 11 = 5 cm.

Build It gets the exam shape right

Assemble a full-mark answer from its marking points, in the order an examiner wants them.

The sunspot cycle lasts about 11 years.
TrueFalse

Test It catches misconceptions

Spot the fault in a statement. The traps are the mistakes students actually make.

721941163128510

Brain Breaks between sessions

Short focus games to reset attention, so the next set lands better than the last.

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.

Or £46 a year, about £3.83 a month. Cancel anytime.