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POP QUIZ
Analysis
Bonus points:
• 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.
1) The financial crisis ___________ in 2008.
• 2) The Central Bank should ____________ the interest rates to boost the economy.
• 3) The value of stocks __________________ significantly since last October.
• 4) They had no competitors and they ________ their prices.• 5) Trying to recover their research and development costs
and they ____________ their prices.
• 6) In 2007 the Banks ____________ the interest rates to make loans more attractive.
aroseslash
has risen
raised
raised
slashed
• Fill in the gaps in sentences using grammatically correct forms of verbs rise, raise, slash, arise.
7) The market value of Facebook __________________ significantly since the beginning of this year.
8) Since our last meeting a new problem ____________.
9) In 2003, the FED ____________ the interest rates to boost the economy.
10) In October, the value of stocks ________ significantly.
has risen
has arisen
slashed
rose
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 Trade
Counter-(Barter) = direct exchange, without the use of money
From the country To the country
Visible Visible
Invisible Trade TradeInvisible
Counter-Counter
(Barter) (Barter)
From the country To the country
Visible Visible
Invisible Trade TradeInvisible
Counter- EXPORTS IMPORTSCounter
(Barter) (Barter)
From the country To the country
B A L A N C E
Visible Visible
Trade Trade
EXPORTS IMPORTS
Balance of trade
B A L A N C E
Visible Visible
Invisible Trade TradeInvisible
Counter- EXPORTS IMPORTSCounter
Trade in goods +
Invisible trade (services) =
Balance of payments
(Barter) (Barter)OUTGOING INCOMING
Visible
Trade Invisible
EXPORTS Counter
(Barter)
Visible
Invisible Trade
Counter- IMPORTS
Trade deficit
(Barter)
BA
LA
NC
E
Balance of tradeBalance of payments
Visible
Trade Invisible
IMPORTS Counter
(Barter)
Visible
Invisible Trade
Counter- EXPORTS
Trade surplus
(Barter)
BA
LA
NC
E
Balance of tradeBalance of payments
→ RB, p 45, task I
International tradeTeamwork:
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 TradeRB 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
READINGPROTECTIONISM AND FREE TRADE
Read paragraphs 1 & 2 to explain:
THE COMPARATIVE COST PRINCIPLE
ABSOLUTE / COMPARATIVE ADVANTAGE
(REASONS & EXAMPLES)
Comparative advantageThe idea that countries should s________ in making the
products that they are particularly good at making, and should i______ products that other countries are better 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
pecialize
mport
Absolute or comparative advantage?
• Brazil - coffee
• China - shoes
• USA - computers
• Canada - timber
• South Korea - hi-fi
Absolute advantage(climate)
Comparative advantage(low labour costs)
Comparative advantage(advanced technology)
Absolute advantage(natural resources)
Comparative advantage(educated, cheap labour force)
Reasons forTRADE 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 r__________
• Trade of goods and services without trade b_______
• Protection of d________ industries against foreign c________
• Government restrictions are placed on the i______ of foreign competitors
(tariffs, quotas and subsidies)
estrictions
arriers
omestic
ompetition
mports
Read paragraphs 3, 4 & 5 to explain:
PROTECTIONISM AND REASONS FOR PROTECTIONISM
TYPES OF TRADE BARRIERS
TRADE LIBERALIZATION vs. PROTECTIONISM(reasons for) (reasons for)
• protect jobs (v____s)• protect d_______c ind.• strategic reasons
– i_____t industries
• political p______e• protect culture (?)• r______e• prevent d________g• reduce a b______e of
payment deficit• r_________e against
restrictions
• specialization• absolute/comparative
advantage• access to markets • intern. competition &
efficiency• efficient market
mechanism• freer movement of
resources• freedom to choose
TRADE LIBERALIZATION vs. PROTECTIONISM(reasons for) (reasons for)
• protect jobs (votes)• protect domestic ind.• strategic reasons
– infant industries
• political pressure• protect culture (?)• revenue• prevent dumping• reduce a balance of
payment deficit• retaliate against
restrictions
• specialization• absolute/comparative
advantage• access to markets • intern. competition &
efficiency• efficient market
mechanism• freer movement of
resources• freedom to choose
TRADE BARRIERS
• Tariffs
• Import quotas
• Embargo
• Subsidies
• Non-tariff barriers:
Import substitution
Safety norms
Customs difficulties and delays
Name the trade barrier1. Taxes on imported goods. They raise the price to
customers and make them less attractive.
2. Limits on the quantity of a product that can be imported into a country e.g. 200,000 cars.
3. Laws and safety guidelines.
4. Making it difficult to arrange all certificates necessary to import into a country.
5. When a country produces and protects goods that cost more than those made abroad.
6. Money paid by a government to producers of certain goods to help them provide low-priced goods without loss to themselves.
7. A government order to stop trade with another country.
Tariffs
Quotas
Subsidy
Safety norms
Import substitution
Embargo
Custom difficulties and delays
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 / restrictionspro________ strategic / infant industriesab_________ sectorsl____ to structural unemploymentred________ a balance of payment deficitpr_________ against dumpingdes_______ or wea______ competitorsret________ against restrictionsa_________ economies of scales____ a limit to importspro______ revenue for the government
Collocations from paragraphs 3, 4 & 5 impose tariffs & quotas / restrictionsprotect strategic / infant industriesabandon a sectorlead to structural unemploymentreduce a balance of payment deficitprotect against dumpingdestroy or weaken competitorsretaliate against restrictionsachieve economies of scaleset a limit to importsprovide 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)
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)
Read paragraphs 8 & 9 to explain:
Collocations from paragraphs 8 & 9:
p_____ the interest r______ the principalr______ (renew) a loanr _________ (postpone) repaymentsi________ severe conditionst_______ blocksl_______the economyl_______trade barriers
pay the interest repay the principalrollover (renew) a loanreschedule (postpone) repaymentsimpose severe conditionstrading blocksliberalize the economylower trade barriersHW: 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
Collocations from paragraphs 8 & 9:
Discussion: For and against free trade
→ MK, p 134
Vocabulary, pp 132 & 134
Reading and discussing, p 135
Need the following phrases?• 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.