Trade & Globalization

Trade & Globalization

1. Specialisation

   • Comparative advantage
     • Effectively and efficiently
       • cost benefits
     • Country focuses on producing what they good at
       • High quality goods
   • Increase employment
     • Promote economic growth
   • Over specialisation
     • world demand fall
       • workers at risk of losing jobs
     • Cheaper imports may destroy their market.
       • Reduced economic diversity

2. Sales & Profits

   • More money to develop new product
   • Lower opportunity cost
     • Higher profit
     • Lower cost of goods for customers
   • Exchange rate risks
     • Effect the asset and liability
       • Lose profits
   • Natural resources are destroyed

3. Stimulate the economy

   • More taxes collect by government
     • Increase the standard of living
   • More income and jobs
     • More competition
   • Inflation
     • Higher interest rate
     • Weaker dollor