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lesson 6

lesson 6

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1. Are there other bases for trade when there are no differences among countries in production conditions? Mention some of the bases. a. patterns of demand b. economy of scale c. innovation or style 2. What is economy of scale? What is the relation between economy of scale and trade? The cost advantages of large-scale production. Trade may occur out of economy economies of scale. 3. What does the theory of international specialization seek to answer? The theory of international specialization seeks to answer the question which countries will produce what goods, with what trade patterns among them. 4. Will complete specialization occur in reality? Why? No. Because for strategic or domestic reasons, a country may continue to produce goods for which it does not have any advantage. 5. What is tariff barriers? What is a customs area and what is a customs union? Tariff barriers are the most common form of trade restriction. Customs area usually coincides with the area of a country. A customs area extending beyond national boundaries to include two or more independent nations is called a customs union. 6. What is most favoured nation treatment? Is it a very special treatment? Why? The term most-favoured-nation treatment refers to a tariff treatment under which a county is required to extend to all signatories any tariff concessions granted to any participating country. MFN treatment is not relly special but is just normal trading status. It gives a country the lowest tariffs only within the tariff’s schedule, but it is still possible to have tariffs. 7. What is the most common form of non-tariff barriers? Explain it in a few words. Quotas or quantitative restrictions are the most common form of non-tariff barriers. A quota limits the imports or exports of a commodity during a given period of time. 8. What are the differences between visible trade and invisible trade? Give a few examples of invisible trade. Visible trade involves the import and export of goods, while invisible trade involves the exchange of services between countries. Transportation service across national boundaries; insurance; tourism and immigrant remittance. 9. Explain briefly the different kinds of tariffs. a. import duties are tariffs levied on goods entering an area while export duties are taxes levied on goods leaving an area. b. The term drawback refers to duties paid on imported goods that are refunded

if the goods are reexported. Drawback: duties paid on imported goods that are refunded when reexported. Highlight: to make prominent; to draw special attention Bulky: taking a lot of space, and often of a shape difficult to handle Perishable: easily to go bad Tariff: duties imposed on goods imported and exported Specific duties: duties levied on the basis of quantity, weight, size etc. of the goods Ad valorem duties: duties levied on the basis of the price of the goods Unilaterally: done by one side or party only Maritime: connected with the sea or navigation Remittance: money sent by pose 1. 一件商品的成本会因生产规模扩大而减少。 The cost will decrease if the goods are produced on a large scale. 2. 在实际中,即使完全的专业化在经济上有利,也可能永远不会发生。 In reality, however, complete specializatin may never occur even when it is economically advantageous. 3. 配额或者说数量限制是最常见的非关税壁垒。 Quotas or quantitative restrictions are the most common form of non-tariff barriers. 4. 有形贸易指货物的进出口贸易,而无形贸易涉及的是国家间劳务交换。 Visible trade involves import and export of goods while invisible trade involves the exchange of services between countries. 5. 国家从事的贸易种类是多样的、复杂的,往往是有形贸易和无形贸易的混合。 The kinds of trade nations engage in are varied and complex, often a mixture of visible and invisible trade.


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