Trade
Overview
Every country in the world trades with others, but that trade is rarely completely free. Governments use tariffs, quotas and other restrictions to protect domestic industries, shape their economies and respond to political pressures. Understanding why and how they do this is central to commerce.
In this lesson you will explore the main methods of trade protection, weigh up the arguments for and against restricting imports, and learn how exchange rates are determined and calculated. You will see how a rising or falling currency changes the cost of imports and exports, and why exchange rate movements matter to every business involved in international trade.
Objectives
- Understand trade protection: tariffs, quotas and trade restrictions, and their impact
- Understand exchange rates: foreign exchange markets, calculation of exchange rates, exchange rate changes, impact of appreciation and depreciation of currency on international trade
Mind map
This topic is mapped out so you can see how the ideas connect.
Open the mind map in the app
Flashcards
Quick recall practice on the facts this topic is tested on.
Practise these cards in the app
Lesson Note
Complete Note Available on the Green Bridge App
Get the Green Bridge CBT app on your phone or computer for the complete IGCSE library: past papers, mark schemes, mind maps, flashcards and audio lessons.
Lesson Evaluation
Congratulations on completing the lesson on Trade. Now that youve explored the key concepts and ideas, its time to put your knowledge to the test. This section offers a variety of practice questions designed to reinforce your understanding and help you gauge your grasp of the material.
You will encounter a mix of question types, including multiple-choice questions, short answer questions, and essay questions. Each question is thoughtfully crafted to assess different aspects of your knowledge and critical thinking skills.
Use this evaluation section as an opportunity to reinforce your understanding of the topic and to identify any areas where you may need additional study. Don't be discouraged by any challenges you encounter; instead, view them as opportunities for growth and improvement.
- Which of the following is a method of trade protection? A) Advertising B) Tariff C) Exchange rate D) Dividend Answer: B
- A quota limits: A) The price of exports B) The quantity of imports C) The exchange rate D) The rate of inflation Answer: B
- If the exchange rate changes from 1 GBP = 1.50 USD to 1 GBP = 1.80 USD, the pound has: A) Depreciated B) Appreciated C) Stayed the same D) Been devalued by the government Answer: B
- When a currency depreciates, what happens to the price of that country's exports for foreign buyers? A) They become more expensive B) They become cheaper C) They stay the same D) They are no longer available Answer: B
- Which argument supports the use of tariffs to protect a new industry? A) It keeps prices low for consumers B) It gives infant industries time to grow C) It increases the range of imports available D) It reduces government revenue Answer: B
Work through these questions in the app
Work through these questions in the app
Recommended Books
Further learning from open sources
-
Textbook section
Barriers to Trade
What are the barriers to international trade?
"Introduction to Business: Barriers to Trade" by OpenStax, OpenStax, Rice University, licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). Source: https://openstax.org/books/introduction-business/pages/3-3-barriers-to-trade. Access for free at https://openstax.org/books/introduction-business/pages/1-introduction
-
Textbook section
Global Trade in the United States
Why is global trade important to the United States, and how is it measured?
"Introduction to Business: Global Trade in the United States" by OpenStax, OpenStax, Rice University, licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). Source: https://openstax.org/books/introduction-business/pages/3-1-global-trade-in-the-united-states. Access for free at https://openstax.org/books/introduction-business/pages/1-introduction
Published by other organisations under open licences, credited as they ask. Links open their websites.
Practice Mock Questions
Want to practice mock questions on Trade? Download the Green Bridge CBT app to access mock questions and full practice assessments for this topic.
Download The App On Google Playstore
Everything you need to excel in your exams
