POP QUIZ
Analysis
Bonus points:
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Ella Puharić 16/26 = 1 bp
Giacomo Trenz 13/26 = ½ bp
Kristian Krnić 15/26 = 1 bp
Filip Filipović 15/26 = 1 bp
Lidija Juzbašić 18/26 = 1 pb
Dan Stričević 18/26 = 1 bp
Martin Obad 18/26 = 1 bp
Karlo Knežević 20,5/26 = 2 bp
Lida Matić 17/26 = 1 bp
Ivan Knežević 23,5/26 = 2 bp
Zvonimir Medvidović 18/26 = 1 bp
MacKenzie Moore 17/26 = 1 bp
• Fill in the gaps in sentences using grammatically correct
forms of verbs rise, raise, slash, arise.
arose
1) The financial crisis ___________
in 2008.
slash
• 2) The Central Bank should ____________
the interest
rates to boost the economy.
has risen
• 3) The value of stocks __________________
significantly
since last October.
raised their prices.
• 4) They had no competitors and they ________
• 5) Trying to recover their research and development costs
raised
and they ____________
their prices.
slashed
• 6) In 2007 the Banks ____________
the interest rates to
make loans more attractive.
• Fill in the gaps in sentences using grammatically
correct forms of verbs rise, raise, slash, arise.
has risen
7) The market value of Facebook __________________
significantly since the beginning of this year.
has arisen
8) Since our last meeting a new problem ____________.
slashed
9) In 2003, the FED ____________
the interest rates to
boost the economy.
rose
10) In October, the value of stocks ________
significantly.
Arise (tenses?)
The financial crisis ___________ in 2008.
Since our last meeting a new problem
____________.
Slash (tenses)
The Central Bank should ____________
the interest rates to boost the economy.
In 2007 the Banks ____________ the
interest rates to make loans more attractive.
In 2003, the FED ____________ the interest
rates to boost the economy.
Rise (tenses?)
The value of stocks ________________
significantly since last October.
The market value of Facebook
___________ significantly since the
beginning of this year.
In October, the value of stocks
____________ significantly.
Raise (tenses?)
They had no competitors and they
________ their prices.
Trying to recover their research &
development costs they ____________ their
prices.
Graph description: NOUNS (RB, p 31-32)
INTERNATIONAL TRADE
+ * EU*
RB, p 45-55
MK, U 27
Trade
• DEFINE “TRADE” USING THESE:
activity / buying / selling / exchange / goods /
services / within / between countries
Trade
The activity of buying, selling or exchanging
goods and services within a country or
between countries. (commerce)
Source: Longman Business English Dictionary
Visible = exchange of goods
Trade
Visible
Invisible
Trade
=
exchange of services
Visible
Invisible
Counter(Barter)
Trade
= direct exchange, without the use of money
From the country
Visible
Invisible
Counter(Barter)
Trade
To the country
Trade
Visible
Invisible
Counter
(Barter)
From the country
To the country
Visible
Invisible
Counter(Barter)
Visible
Trade
Invisible
IMPORTS Counter
(Barter)
Trade
EXPORTS
From the country
Visible
To the country
BALANCE
Visible
Trade
Trade
EXPORTS
IMPORTS
Balance of trade
BALANCE
Visible
Invisible
Counter(Barter)
Trade
EXPORTS
OUTGOING
Visible
Trade
Invisible
IMPORTS Counter
(Barter)
INCOMING
Trade in goods
+
Invisible trade (services)
=
Balance of payments
Visible
Invisible
Counter(Barter)
B
E
Visible
C
Trade
Invisible
N
A
EXPORTS Counter
L
A
(Barter)
Trade
IMPORTS
Trade deficit
Balance of trade
Balance of payments
Visible
Invisible
Counter(Barter)
B
E
Visible
C
Trade
Invisible
N
A
IMPORTS Counter
L
A
(Barter)
Trade
EXPORTS
Trade surplus
→ RB, p 45, task I
Balance of trade
Balance of payments
International trade
Teamwork:
1) Brainstorm reasons for importing foreign
products: e.g. honey
Why import honey?
What makes imported honey cheaper?
What could make imported honey more
expensive?
International Trade
RB 45-47
Free Trade
and Protectionism
READING:
PROTECTIONISM AND FREE TRADE
Plan:
1) Reading groups of paragraphs: 1 + 2
3+4+5
6 +7
8+9
to learn about relevant concepts
(e.g. comparative cost principle, tariffs)
2) Focus on vocabulary: typical collocations
READING
PROTECTIONISM AND FREE TRADE
Read paragraphs 1 & 2 to explain:
THE COMPARATIVE COST PRINCIPLE
ABSOLUTE / COMPARATIVE ADVANTAGE
(REASONS & EXAMPLES)
Comparative advantage
The idea that countries should s________
pecialize in making the
products that they are particularly good at making, and
mport products that other countries are better
should i______
at making.
Longman Business English Dictionary
• Comparative advantage the advantage that one
country has over another because it is better at making a
particular product.
Longman Business English Dictionary
• Absolute advantage is the ability of a country to
produce a particular good at a lower absolute cost than
any other country.
http://www.investopedia.com
Absolute or comparative advantage?
• Brazil
- coffee
Absolute advantage
(climate)
• China
- shoes
Comparative advantage
(low labour costs)
• USA
- computers
• Canada - timber
• South Korea - hi-fi
Comparative advantage
(advanced technology)
Absolute advantage
(natural resources)
Comparative advantage
(educated, cheap labour force)
Reasons for
TRADE LIBERALIZATION (Free trade)
• spe_______n
• a______e/c________e
advantage
• a_____s to markets
• intern. c________n &
efficiency
• efficient market
m_________m
• freer m________t of
resources
• f______m to choose
Reasons for
TRADE LIBERALIZATION (free trade)
• specialization
• absolute/comparative
advantage
• access to markets
• intern. competition &
efficiency
• efficient market
mechanism
• freer movement of
resources
• freedom to choose
Collocations from pgs 1 & 2
rai______ living standard
spe______ in the production
c________ advantage ___ producing...
fac______ of production
div_______ of labour
ec_______ of scale
Collocations from pgs 1 & 2
raise living standard
specialize in the production
comparative advantage in producing...
factors of production
division of labour
economies of scale
Free trade vs. Protectionism
• International trade
(imports and exports)
without government
estrictions
r__________
• Trade of goods and
services without trade
arriers
b_______
• Protection of
omestic industries
d________
against foreign
ompetition
c________
• Government
restrictions are placed
mports of
on the i______
foreign competitors
(tariffs, quotas and
subsidies)
Read paragraphs 3, 4 & 5 to explain:
PROTECTIONISM AND REASONS FOR
PROTECTIONISM
TYPES OF TRADE BARRIERS
TRADE LIBERALIZATION vs. PROTECTIONISM
(reasons for)
(reasons for)
• specialization
• absolute/comparative
advantage
• access to markets
• intern. competition &
efficiency
• efficient market
mechanism
• freer movement of
resources
• freedom to choose
• protect jobs (v____s)
• protect d_______c ind.
• strategic reasons
– i_____t industries
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•
•
•
•
political p______e
protect culture (?)
r______e
prevent d________g
reduce a b______e of
payment deficit
• r_________e against
restrictions
TRADE LIBERALIZATION vs. PROTECTIONISM
(reasons for)
(reasons for)
• specialization
• absolute/comparative
advantage
• access to markets
• intern. competition &
efficiency
• efficient market
mechanism
• freer movement of
resources
• freedom to choose
• protect jobs (votes)
• protect domestic ind.
• strategic reasons
– infant industries
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political pressure
protect culture (?)
revenue
prevent dumping
reduce a balance of
payment deficit
• retaliate against
restrictions
TRADE BARRIERS
• Tariffs
• Import quotas
• Embargo
• Subsidies
• Non-tariff barriers:
Import substitution
Safety norms
Customs difficulties and delays
Name the trade barrier
1. Taxes on imported goods. They raise the price to
customers and make them less attractive. Tariffs
2. Limits on the quantity of a product that can be imported
Quotas
into a country e.g. 200,000 cars.
3. Laws and safety guidelines.
Safety norms
4. Making it difficult to arrange all certificates necessary to
import into a country. Custom difficulties and delays
5. When a country produces and protects goods that cost
more than those made abroad. Import substitution
6. Money paid by a government to producers of certain
goods to help them provide low-priced goods without
loss to themselves. Subsidy
7. A government order to stop trade with another country.
Embargo
Barriers to free trade: tariffs, quotas, subsidies,
customs duty, import licence,
complicated regulations for documents
TARIFFS
• to impose / set a tariff
• to place a tariff on sth
• to eliminate / lift a tariff
• high / low tariffs
QUOTAS
• to impose / introduce / lift / set quotas
• to increase / raise / reduce a quota
• to comply with / exceed quotas
Barriers to free trade: tariffs, quotas, subsidies,
customs duty, import licence,
complicated regulations for documents
SUBSIDY
• government / state subsidies
• to get / qualify for / receive a subsidy
• to give / grant / pay / provide a subsidy
CUSTOMS DUTY
the customs duties on foreign cars
Collocations from paragraphs 3, 4 & 5
im________ tariffs & quotas / restrictions
pro________ strategic / infant industries
ab_________ sectors
l____ to structural unemployment
red________ a balance of payment deficit
pr_________ against dumping
des_______ or wea______ competitors
ret________ against restrictions
a_________ economies of scale
s____ a limit to imports
pro______ revenue for the government
Collocations from paragraphs 3, 4 & 5
impose tariffs & quotas / restrictions
protect strategic / infant industries
abandon a sector
lead to structural unemployment
reduce a balance of payment deficit
protect against dumping
destroy or weaken competitors
retaliate against restrictions
achieve economies of scale
set a limit to imports
provide revenue for the government
Read paragraphs 6 & 7 to explain:
ORGANISATIONS PROMOTING FREE TRADE &
THEIR FUNCTION
Most favoured nation clause?
The final GATT agreement? (when and what?)
Which organization superseded GATT?
OPPOSITION TO FREE TRADE (who and why?)
Removing trade barriers
• Organisations set up to encourage the
removal of barriers to free global trade:
– IMF
– World Bank
– WTO
• Countries join or face exclusion from
benefits of free world trade
Collocations from paragraphs 6 & 7
gr____ favourable conditions
opp_____ free trade
countera_____a fall in prices
pra______ import substitution
Collocations from paragraphs 6 & 7
grant favourable conditions
oppose free trade
counteract a fall in prices
practice import substitution
Read paragraphs 8 & 9 to explain:
PROBLEMS & FEARS OF DEVELOPING
COUNTRIES (IMF)
OTHER REASONS FOR DEVELOPING
COUNTRIES TO REDUCE THEIR
PROTECTIONISM
Read paragraphs 8 & 9 to explain:
REASONS FOR DEVELOPING COUNTRIES TO
REDUCE PROTECTIONISM:
1 need to repay huge d____ - IMF imposed
obligation to export
2 s_______ of the East Asian “Tiger” economies
3 c_______ of the Soviet Union
4 potential ex________ from the t______ blocks
(the EU, NAFTA)
Read paragraphs 8 & 9 to explain:
PROBLEMS & FEARS OF DEVELOPING
COUNTRIES (IMF)
1 need to repay huge debts - IMF imposed
obligation to export
2 success of the East Asian “Tiger” economies
3 collapse of the Soviet Union
4 potential exclusion from the trading blocks
(the EU, NAFTA)
Collocations from paragraphs 8 & 9:
p_____ the interest
r______ the principal
r______ (renew) a loan
r _________ (postpone) repayments
i________ severe conditions
t_______ blocks
l_______the economy
l_______trade barriers
Collocations from paragraphs 8 & 9:
pay the interest
repay the principal
rollover (renew) a loan
reschedule (postpone) repayments
impose severe conditions
trading blocks
liberalize the economy
lower trade barriers
HW: RB, p 47 Write the questions.
RB, pp 48-49 Oh, sweet reason (compare with N on p 135)
MK, p 133 Education and protection – read and
answer the questions
Discussion: For and against free trade
→ MK, p 134
Vocabulary, pp 132 & 134
Reading and discussing, p 135
Need the following phrases?
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I am sure that...
In my opinion... / I believe / From my point of view
It is only fair / right to admit...
It is difficult to take a firm stand on this, but ...
Let me give you an example ... / If I may illustrate ...
As / because of / since / consequently / therefore
Firstly... Secondly... Thirdly...
I am afraid that ...
Although .... , I have to say ...
Furthermore, ..../ Moreover,....
However,...
Report writing task 2, RB p 25
• Teamwork:
Write a short report and hand it in.