Protectionism methods The chief protectionist measures, government-levied tariffs, raise the price of imported articles, making them less attractive to consumers than cheaper domestic products. Import quotas, which limit the quantities of goods that can be imported,...
Globalisation What is it? It is the increasing integration of countries’ individual economies. It is the global movement towards trade, financial and communications integration through the development of free trade, free flow of capital, and the freedom to tap into...
Balance of Payments on Current Accounts What is it? It is a set of accounts that record a country’s international transactions and which (because double entry bookkeeping is used) is always in balance with no surplus or deficit shown on the overall basis. It serves...
Visible and Invisible Visible Trade Visible trade involves trading of goods which can be touched and weighed. Examples include trade in goods such as Oil, machinery, food, clothes etc. Visible Trade consists of Visible exports: Selling of tangible goods which can be...
Absolute advantage A country has an absolute advantage over another in producing a good, if it can produce that good using fewer resources than another country. For example if one unit of labor in Australia can produce 80 units of wool or 20 units of wine; while in...
Free trade Definition: International trade left to the mechanisms of demand and supply without influence of protectionist methods. Reasons for Free Trade Domestic Non-availability A nation trades because it lacks the raw materials, climate, specialist labour, capital...