Theory question 110
International TradeSection B (answer four questions only from this section)
In what ways is foreign trade different from domestic trade?
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Foreign trade crosses national boundaries; domestic trade takes place within one country.
Foreign trade involves different currencies and foreign exchange; domestic trade uses one currency.
Foreign trade faces tariffs, quotas, embargoes and exchange controls; domestic trade does not.
Different weights, measures, laws and customs in foreign trade.
Language and cultural differences in foreign trade.
Foreign trade involves longer distances, higher transport and insurance costs and more risk.
Foreign trade requires more documents (bills of lading, import licences, certificates of origin).
Factors of production move less freely between countries.
Set out each difference point against point.