International Trade - Business Revision Notes
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- International Trade is the commerce between companies in different countries. It involves importing and exporting goods from Ireland and abroad.
- Visible Exports: Ireland sells products to foreign countries. Example: Waterford crystal being sold in the EU.
- Invisible Exports: Ireland sells services to foreign countries. Example: an Irish band doing a concert in the UK.
- Visible Imports: Ireland buys products from foreign countries. Example: an Irish shop buying oranges from Spain.
- Invisible Imports: Ireland buying services from foreign countries. Example: An American singer having a concert in Ireland.
Balance of Trade= Visible exports- visible imports
Balance of Payments= total exports- total imports
- Lack of natural resources: may not have resources needed for business – must import. Example: oil
- Unsuitable climate: may not have the correct weather conditions. Example: coffee, bananas
- Lack of skills: some countries have tradition in being very skilled making certain products. Example: Swiss watches better than Irish watches.
- Bigger choice for consumers: Government doesn’t block trade – consumers have more choice. Example: you can buy potatoes from outside Ireland.
- Survival: home market may be too small to make a profit.
- To increase sales and profits: U2 sell CDs worldwide – bigger market.
- Diversification: if sales in one country go through a bad patch (recession). sales in other countries should ...