World Geography / Unit 4: Economic and Political Geography
4.4 Trade and Globalization
Notes
Trade is the exchange of goods and services across borders. Imports come into a country; exports go out.
- Comparative advantage: a country does best by specializing in what it produces at the lowest opportunity cost and trading for the rest.
- A trade surplus means exports exceed imports; a trade deficit means imports exceed exports.
- Tariffs are taxes on imports; quotas limit quantity; an embargo bans trade with a country. Free trade removes such barriers.
- Globalization is the growing connection of economies, cultures and technology worldwide. Container ships, the internet and air freight speed it.
- Landlocked countries often depend on neighbors' ports for trade.
Practice
A country that sells more goods abroad than it buys has a
Exports exceeding imports is a surplus.
A government adds a tax on imported steel. This is a
A tariff is a tax on imports.
Two countries specialize in what each makes best and trade for the rest. This idea is called
Specializing by lowest opportunity cost makes both better off.
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