Chapter 1 Introduction to International trade
Questions & Answers (terms)
•International trade(the fair and deliberate exchange of goods and/or services across national boundaries）
•Trade in goods (the purchase and sale of visible goods:coffee, chemicals, airplanes, textiles, tobacco)&Trade in services(the purchase and sale of invisible goods: transportation, insurance, tourism, hotel accommodations, commerce)
•Self-sufficient (someone who does his own hunting, finds his own shelter, and provides for his own needs)
•Barter (the trade of goods without any exchange of money)
•Balance of trade (a nation’s rel ationship of exports to imports). A favorable balance of trade, or trade surplus, occurs when the value of the country’s expor ts exceeds that of its imports;An unfavorable balance of trade, or trade deficit, occurs when the value of the country’s imports exceeds that of its exports.
•Balance of payments [the difference between money coning into a country (from exports) and money going out of the country (for import) plus money flows coming into or leaving
a country from other factors such as tourism, foreign aid.BOP=EM-IM+MF]. A
favorable balance of payments means more money is flowing into a country than flowing out;An unfavorable balance of payments is when more money is flowing out of
a country than coming in.
•Dumping(the practic of selling products in foreign country at lower prices than those charged in the producing country). Companies use this tactic to reduce surplus products in foreign markets or to gain a foothold in a new market by offering products for lower prices than domestic competitors do.
The foundation of international trade and economic activities：In today’s complex economic world, neither individuals nor nations are self-sufficient. Nations have utilized different economic resources; people have developed different skills.
Questions & Answers (text)
•What are major reasons of the exchange of goods between nations?
✧First, no nation has all of the commodities that it needs.
✧Second, a country often does not have enough of a particular item to meet its needs.
✧Third, one nation can sell some items at a lower cost than other countries.
✧Finally, foreign trade takes place because of innovation or style (fashion).
•Why is FDI now more important than trade?
✧First, FDI enables host country to build a new manufacturing plant and to pay
workers to build it.
✧Second, once the plant is operative, it provides both jobs and taxes for host country.
✧Third, FDI acts as a catalyst (催化剂) in economic growth for host country.
•Why inflows into Sub-Saharan Africa have increased?
Tourism is the world's largest industry and every year it pumps billions of dollars into some of the poorest countries in the world. It creates jobs, reduces poverty, builds new roads, airports, hotels and hospitals.
•What are major obstacles to Chinese foreign trade?
✧Firstly, China should deal with pressure from international markets that are
