1. POP QUIZ
Analysis

2. 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

3. arose slash has risen raised raised slashed
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.
arose
slash
has risen
raised
raised
slashed

4. has risen has arisen slashed rose
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

5. Arise (tenses?) The financial crisis ___________ in 2008.
Since our last meeting a new problem ____________.

6. 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.

7. 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.

8. Raise (tenses?)
They had no competitors and they ________ their prices.
Trying to recover their research & development costs they ____________ their prices.

9. Graph description: NOUNS (RB, p 31-32)

10. 10

11. INTERNATIONAL TRADE + * EU*
RB, p 45-55
MK, U 27 11

12. Trade DEFINE “TRADE” USING THESE:
activity / buying / selling / exchange / goods / services / within / between countries

13. Trade
The activity of buying, selling or exchanging goods and services within a country or between countries. (commerce)
Source: Longman Business English Dictionary 13

14. Visible = exchange of goods Trade
They trade in services, which is known as invisible trade. 14

15. Visible Invisible Trade = exchange of services
And finally, there is direct exchange of goods, when money is not involved, which is barter or counter-trade. 15

16. Visible Invisible Trade Counter- (Barter)
= direct exchange, without the use of money

17. From the country To the country Visible Visible
Invisible Trade Trade Invisible
Counter Counter
(Barter)
(Barter) 17

18. From the country To the country Visible Visible
Invisible Trade Trade Invisible
Counter- EXPORTS IMPORTS Counter
(Barter)
(Barter) 18

19. From the country To the country B A L A N C E Visible Visible
Trade Trade
EXPORTS IMPORTS
The balance of trade
The visible trade of imported raw materials and manufactured goods and the exported raw materials and manufactured goods adds up to the balance of trade.
The balance of trade is the difference between a country’s total imports and exports of goods. The difference in the monetary value of exports and imports.
Balance of trade 19

20. Invisible Trade Trade Invisible Counter- EXPORTS IMPORTS Counter
B A L A N C E
Visible Visible
Invisible Trade Trade Invisible
Counter- EXPORTS IMPORTS Counter
(Barter)
(Barter)
OUTGOING
INCOMING
Trade in goods +
Invisible trade (services) =
Balance of payments
The balance of trade
The visible trade of imported raw materials and manufactured goods and the exported raw materials and manufactured goods add up to the balance of trade.
The balance of trade is the difference between a country’s total imports and exports of goods. The difference in the monetary value of exports and imports.
When the invisible trade (the value of exported and imported services) is included, the total is the balance of payments.
The balance of payments is the difference between all the money paid out and received by a country. A country’s total earnings from exports and its total expenditures on imports. It summarizes all international economic transactions for the country.
The balances can be either positive or negative. What are the words we use to describe these situations? 20

21. Visible Trade Invisible E EXPORTS Counter C (Barter) N A
Invisible Trade
Counter- IMPORTS E C N A L A B
(Barter)
A positive balance, exporting more than is imported is a trade surplus. The opposite is a trade deficit.
Trade deficit
Balance of trade
Balance of payments 21

22. Visible Trade Invisible E IMPORTS Counter C (Barter) N A
Invisible Trade
Counter- EXPORTS E C N A L A B
(Barter)
A positive balance, exporting more than is imported is a trade surplus. The opposite is a trade deficit.
Trade surplus
Balance of trade
Balance of payments
→ RB, p 45, task I 22

23. International trade Teamwork:
Brainstorm reasons for importing foreign products: e.g. honey
Why import honey?
What makes imported honey cheaper?
What could make imported honey more expensive?

24. International Trade RB 45-47
Free Trade
and Protectionism 24

25. READING: PROTECTIONISM AND FREE TRADE
Plan:
Reading groups of paragraphs: 1 + 2
6 +7
8 + 9 to learn about relevant concepts (e.g. comparative cost principle, tariffs)
2) Focus on vocabulary: typical collocations

26. READING PROTECTIONISM AND FREE TRADE
Read paragraphs 1 & 2 to explain:
THE COMPARATIVE COST PRINCIPLE
ABSOLUTE / COMPARATIVE ADVANTAGE
(REASONS & EXAMPLES)

27. Comparative advantage
pecialize
The 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.
Absolute advantage is the ability of a country to produce a particular good at a lower absolute cost than any other country.
mport

28. 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)

29. 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 29

30. 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 30

31. Collocations from pgs 1 & 2
rai______ living standard
spe______ in the production
c________ advantage ___ producing...
fac______ of production
div_______ of labour
ec_______ of scale

32. 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

33. 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)
omestic
estrictions
ompetition
arriers
mports

34. Read paragraphs 3, 4 & 5 to explain:
PROTECTIONISM AND REASONS FOR PROTECTIONISM
TYPES OF TRADE BARRIERS

35. 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 35

36. 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 36

38. TRADE BARRIERS
Tariffs
Import quotas
Embargo
Subsidies
Non-tariff barriers:
Import substitution
Safety norms
Customs difficulties and delays

39. Name the trade barrier
Taxes on imported goods. They raise the price to customers and make them less attractive.
Limits on the quantity of a product that can be imported into a country e.g. 200,000 cars.
Laws and safety guidelines.
Making it difficult to arrange all certificates necessary to import into a country.
When a country produces and protects goods that cost more than those made abroad.
Money paid by a government to producers of certain goods to help them provide low-priced goods without loss to themselves.
A government order to stop trade with another country.
Tariffs
Quotas
Safety norms
Custom difficulties and delays
Import substitution
Subsidy
Embargo

40. 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

41. 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

42. 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

43. 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

44. 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?)

45. 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

46. Collocations from paragraphs 6 & 7
gr____ favourable conditions
opp_____ free trade
countera_____a fall in prices
pra______ import substitution

47. Collocations from paragraphs 6 & 7
grant favourable conditions
oppose free trade
counteract a fall in prices
practice import substitution

48. Read paragraphs 8 & 9 to explain:
PROBLEMS & FEARS OF DEVELOPING COUNTRIES (IMF)
OTHER REASONS FOR DEVELOPING COUNTRIES TO REDUCE THEIR PROTECTIONISM

49. 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)

50. 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)

51. 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

52. 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 Oh, sweet reason (compare with N on p 135)
MK, p 133 Education and protection – read and answer the questions

53. Discussion: For and against free trade
→ MK, p 134
Vocabulary, pp 132 & 134
Reading and discussing, p 135

54. 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,...

55. Report writing task 2, RB p 25
Teamwork:
Write a short report and hand it in.