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In a modern society very few countries can survive by entirely depending on their own domestic (home) trade - Leaving Cert Business - Question A - 2001
Question A
In a modern society very few countries can survive by entirely depending on their own domestic (home) trade. Nearly all countries are interdependent on each other an... show full transcript
Worked Solution & Example Answer:In a modern society very few countries can survive by entirely depending on their own domestic (home) trade - Leaving Cert Business - Question A - 2001
Step 1
International Trade
Answer
International trade plays a crucial role in the economic development of Ireland. It allows the country to export goods and services that may not be available domestically, thereby increasing national income and promoting economic growth. The influx of foreign goods also offers consumers greater choice and variety, contributing to increased competition among domestic businesses, leading to better pricing and innovation.
Moreover, Ireland's membership in the European Union has facilitated easier access to larger markets, which is vital for its export-driven economy. By engaging in international trade, Ireland can benefit from specialization, allowing industries to focus on their strengths while importing goods that may be more efficiently produced abroad.
Step 2
Trading Blocks
Answer
Trading blocks, such as the European Union and the North American Free Trade Agreement (NAFTA), have significant implications for Ireland's international trade. They reduce or eliminate tariffs and quotas among member countries, making it easier and cheaper for Ireland to engage in trade with other nations.
For Ireland, being part of the EU means that it can benefit from numerous trade agreements with non-member countries, enhancing its global trade relations. This cooperation can further strengthen Ireland’s economic position, enabling Irish firms to expand their reach and foster deeper economic ties with international partners.
Step 3
Transnational Companies
Answer
Transnational companies (TNCs) are integral to Ireland's economy, particularly in sectors such as technology and pharmaceuticals. These companies often establish operations in Ireland due to its favorable corporate tax rates, thus creating employment opportunities and contributing to local economic development.
Additionally, TNCs play a vital role in international trade by facilitating the export of goods and services from Ireland. They can leverage global supply chains to optimize production efficiency and access international markets more effectively. The presence of such companies further enhances Ireland's reputation as a global business hub, attracting more foreign direct investment.