IB+International+revision

Revision of International Economics

3.1 International Trade 3.2 Exchange Rates 3.3 Balance of Payments 3.4 Economic Intergration 3.5 Terms of Trade

3.1 International Trade Benefits of trade Using economic language, we should remember the following gains from trade – essentially, the reasons why it is better to trade than try and produce all goods in one country: Note HL students should be able to explain increased output gains from trade by numerical and diagrammatic explanation of absolute and comparative advantage models. Here is the basic diagram to use. Summarise this in words:
 * Lower prices for consumers
 * Greater choice for consumers:
 * Producers can benefit from economies of scale:
 * Allocative and productive efficiency: More output by the cheapest producers
 * Increased competition: global trade exerts what is called “competitive pressure” on producers. This is the "Dynamic Efficiency Gain"

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<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Watch this revision video if you are still unsure about absolute and comparative advantage

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<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Reasons for and against Protectionism <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">media type="file" key="Tariff movie.swf" width="624" height="624"

<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">3.2 Exchange rates: <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Summary
 * <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Fixed exchange rates mean that the value of a currency is fixed to that of another currency: central [[image:managed_X_rate.jpeg align="right"]]authorities intervene tomanipulate supply/demand and keep the exchange rate constant over time.
 * <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Managed exchange rates require a minimum and maximum target beyond which the price of a currency is not allowed to float. If it does, intervention is required.
 * <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">The management of national currencies brings stability to the economic system, but it comes at the expenses of monetary policy targets and requires large reserves.
 * <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Auto-correction of balance of payments deficits are easier in freely-floating systems at lower costs for the government

<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">3.3 Balance of Payments <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">

<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">. <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">3.4 Economic Intergration <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">3.5 Terms of Trade

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<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Typical DRQ and markschemes produced by Yr 13 students 2014

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<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">MEMORY BOARD EXERCISE GAME (P128 TEACHER'S TOOLKIT) <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">In pairs you each take turns learning the key definitions. You have 2 minutes each time to look at the terms and learn each one. You must then recite them to your partner. They then learn their key definitions from the 2nd document and repeat the process. You must repeat the process until you know all the key terms perfectly. This should illustrate the key benefit of repetitive learning. <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;"> <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">

<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Lets make some questions up ourselves

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