International economics

Table of Contents

1. Topic pack - International economics - introduction
2. Section 3.1 International trade (notes)
3. Section 3.1 International trade (questions)
4. Section 3.1 International trade - simulations and activities
5. Section 3.2 Exchange rates (notes)
6. Section 3.2 Exchange rates - questions
7. Section 3.2 Exchange rates - simulations and activities
8. Section 3.3 Balance of payments - notes
9. Section 3.3 Balance of payments - questions
10. Section 3.4 Economic integration - notes
    1. Economic integration - introduction
    2. Where does trade occur?
    3. Stages of economic integration
    4. Trade blocs
    5. The effects of trade blocs
    6. Obstacles to achieving integration
    7. Monetary union
    8. Advantages & disadvantages of single currencies
11. Section 3.4 Economic integration - questions
12. Section 3.5 Terms of trade - notes
13. Section 3.5 Terms of trade - questions
14. Print View

Section 3.4 Economic integration - notes

In this section we will look at the various forms of economic integration including preferential trading agreements, trading blocs and monetary union.

By the end of this section you should be able to:

• Distinguish between bilateral and multilateral (WTO) trade agreements.
• Explain that preferential trade agreements give preferential access to certain products from certain countries by reducing or eliminating tariffs, or by other agreements relating to trade.
• Distinguish between a free trade area, a customs union and a common market.
• Explain that economic integration will increase competition among producers within the trading bloc.
• Compare and contrast the different types of trading blocs.
• Explain that a monetary union is a common market with a common currency and a common central bank.
• Discuss the possible advantages and disadvantages of a monetary union for its members.

• Explain the concepts of trade creation and trade diversion in a customs union.
• Explain that different forms of economic integration allow member countries to gain from economies of scale.