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Using the above information, calculate the Balance of Trade - Leaving Cert Business - Question A - 2016
Question A
Using the above information, calculate the Balance of Trade. Show your workings. State whether it is a surplus or a deficit. List two examples of goods imported in... show full transcript
Worked Solution & Example Answer:Using the above information, calculate the Balance of Trade - Leaving Cert Business - Question A - 2016
Step 1
Using the above information, calculate the Balance of Trade. Show your workings.
Answer
To find the balance of trade, we use the formula:
Substituting the given values:
Visible Exports = €4,800m Visible Imports = €3,700m
Thus, the calculation becomes:
The Balance of Trade is €1,100m, indicating a surplus.
Step 3
Outline two reasons why goods are imported into Ireland.
Answer
- Production Limitations: Ireland does not produce certain essential goods, such as tropical fruits, necessitating imports to meet consumer demand.
- Consumer Choice: Consumers prefer a variety of products, which encourages importation of different goods to satisfy diverse preferences.
Step 4
Outline two challenges for Irish businesses involved in international trade.
Answer
- Cultural Differences: Understanding different cultures is essential; for instance, in some cultures, specific foods are not consumed, which can affect product availability.
- Currency Exchange Rates: Fluctuations in exchange rates can lead to increased costs for businesses when importing goods, affecting overall competitiveness.
Step 5
Outline two uses of Information and Communications Technology (ICT) in international trade.
Answer
- E-Commerce: Businesses can sell goods and services online via their websites, facilitating international transactions.
- Market Research: Companies can utilize the internet for market research, gathering data on consumer preferences and trends that inform their trade strategies.
Step 6
Outline two advantages to Ireland of being a member of the European Union.
Answer
- Single Market Access: Membership allows Irish businesses to sell goods and services across EU countries without tariffs, fostering trade.
- Infrastructure Funding: The EU provides financial support for infrastructure projects, which can improve trade efficiency and economic growth in Ireland.