Question

Short Answer Questions

1. Explain trade barriers and list two kinds of trader barriers.

2. Is trade today different from the past? Please list three points to support your opinion.

3. In your opinion, what's the impacts of globalization on international trade?

4. Some people say international trade is always bad while some other people believe that international trade is always good. Do you think their opinions are right or wrong? Please defense your answer with what you learned in this class in detail.

5. Which one of the three basic international trade models (i.e., the Ricardian Model, the Specific-Facotor Model, and the H-O model) do you like most, why? (Please explain with real world cases or relevant theories)

6. Talk about your gains and thoughts during and after studying international trade.

Answer 1

ANSWER 1:

Trade barriers are the restrictions put up by the government for indulging in trade with a foreign country, state, or region. The trade barriers may be used to promote domestic production and to reduce the imports. The two kinds of trade barriers are as follows:

a) Taxes

The government puts a high amount of taxes and duties on the movement of products and services from the domestic country to a foreign country. These are the monetary restrictions.

b) Quotas

The quotas are another kind of trade barrier where the restriction is put on the number of goods or services to be transported from one place to another. It restricts the movement of goods above a certified limit.

ANSWER 2:

Yes, the trade today is different from the past. I think so because of the following reasons:

a) The world is leading towards globalization. The nations are indulging in international trade more frequently as compared to the past.

b) The technologies being used are updated regularly and all the companies are adopting modern technologies rapidly. On the other hand, the technology used was not very popular in the past. The world was more labor-intensive earlier, but now it is moving towards more and more machinery.

c) The competition is increasing day by day. The companies today have to deal with cut-throat competition and survive in the market. Earlier, the level of competition was not so intense.

ANSWER 3:

Globalization has put a great impact on international trade. More nations are coming together to do trade with each other and their governments are simplifying the entry of foreign players into their market. This has increased the reach of a company to a larger market. The consumers can also have access to a great variety of products at attractive prices. Thus, competition is also increasing. The firms have to formulate their strategies as per their competitors and a price drop by one firm forces the competitors to do the same to survive in the market.

Globalization has affected international trade both, positively and negatively. On one hand, it provides the consumers with a variety of products at cheaper prices, the companies can import the raw materials easily and set up their subsidiaries in a foreign country with cheaper resources. On the other hand, it raises the competition and making the survival difficult, and domestic production may also get affected adversely due to the presence of multinationals.

ANSWER 4:

International trade has its advantages and disadvantages. I think both opinions are partially correct. For supporting my view, I would mention the advantages and disadvantages of international trade.

Advantages:

1. It allows consumers to have a variety of products are at a cheaper price.

2. The companies can easily procure raw materials and resources from foreign countries.

3. The nations can sell their surplus products to foreign nations and earn profits through competitive advantage.

Disadvantages:

1. This is leading to cut-throat competition.

2. It is difficult for some firms to survive due to intense competition.

3. The domestic production may get affected negatively due to the presence of MNCs.