EconomicsCode 9708
The reasons for international trade
What this topic asks you to be able to do
- the difference separating absolute advantage from comparative advantage
- the gains from specialisation and from free trade (trade liberalisation), including what the trading possibility curve shows
- the export and import flows, along with the terms of trade: how the terms of trade are measured; the causes of movements in the terms of trade; the consequences of shifts in the terms of trade
- the weaknesses found in the theories covering absolute advantage and comparative advantage