An open economy is an economy where exports and imports make up a large percentage of GDP.
A closed economy is a country which does not participate in any international trade.
Trading partners are countries that trade with each other regularly.
A trade embargo refers to a complete or partial ban on doing business with a particular country.
A tariff is a tax charged on specific imports.
A subsidy is a form of government financial aid given to a producer to help reduce their costs.
The European Union is a large international free-trade area and political alliance.
Key Concepts
1. Explain what is meant by globalisation. 2. Explain the term ‘international trade’. 3. In relation to trade, explain the following terms:
(a) Visible trade (b) Exports (c) Imports (d) Balance of trade (e) Invisible trade (f) Balance of payments (g) Open economy (h) Closed economy
4. Explain the economic benefits of international trade for the following stakeholders: (a) Irish businesses (b) Irish Consumers (c) The Irish government
5. Name and explain three barriers to free international trade. 6. Distinguish between a tariff and a trade embargo. 7. What is the European Union? 8. Explain two advantages and two disadvantages of Eurozone membership.
Critical Thinking Skills 1. List three reasons why countries may want to join the EU.
2. Identify two economic and two social benefits of Ireland’s membership of the EU.
3. Identify two economic and two social disadvantages of Ireland’s membership of the EU.
