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

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

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

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)

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

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 13

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

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

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

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

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

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

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

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

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

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?

International Trade RB 45-47 Free Trade and Protectionism 24

READING: PROTECTIONISM AND FREE TRADE Plan: 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 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. http://www.investopedia.com 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 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

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

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) omestic estrictions ompetition arriers 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 35

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

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

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

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? 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.