1143 Definitions Flashcards
selling a good below cost in a foreign country
dumping
free-trade association among nations
common market
international organization dedicated to eliminating trade barriers
WTO
note replacing national money in EMU nations
euro
charged as low a tariff on exports as any other nation
most-favored nation
complete restrictions on imports or exports
embargoes
limit the quantity of imported goods
Quotas
taxes placed on traded goods
Tariffs
usually established for political reasons
Embargoes
encourages customers to purchase domestic goods
nationalistic appeal
WTO
World Trade Organization
a European free-trade organization that removed all trade barriers among its member nations in 1992
European Union
as long as the relative opportunity costs of producing goods differ among nations, there are political gains from trade, even in one nation has an absolute advantage in the production of everything
The principle of comparative advantage
the most common trade restrictions
Tariffs
procedural rules that limit imports
regulatory trade restrictions
difference between the value of a nation’s imports and the value of its exports
balance of trade
imports > exports
trade deficit
exports > imports
trade surplus
ability to produce goods more inexpensively than other nations
competitiveness
growth based on a trade surplus
export-led growth
price of one currency in terms of another
exchange rate
firm with global operations
multinational corporation
record of all transactions between a nation’s residents and those of all foreign nations
balance of payments
primary short-run determinant of exchange rates
interest rates
fixed in relation to the price of a precious metal
gold standard
based entirely on the currency market
flexible exchange rate
always established by the government
fixed exchange rate
sometimes controlled by the government and sometimes allowed to fluctuate
partially flexible exchange rate
was established by the Bretton Woods system
fixed exchange rate
the only force used to enforce international rules
Moral tradition
is often a major influence on the economy of a small nation
global, or multinational, corporation
forgoing present consumption to enable future consumption
saving
business whose primary activities are buying, selling, and holding financial assets
financial institution
any financial asset that serves the function of money
money
insurer of bank deposits
FDIC
bond that involves a high risk
junk bond
market of declining prices
bear market
market of rising prices
bull market
periodic payment made to stockholders
dividend
increase in the value of a stock
capital gain
short-term promissory note issued by a large corporation
commercial paper
government IOU with a maturity of less than one year
U.S. Treasury bill
less expensive, more risky stock
common stock
stock that pays a fixed dividend rate
preferred stock
root of all evil
love of money
issues money in the U.S.
Federal Reserve Bank
the broadest definition of money and includes all short-term financial assets
L
the narrowest definition of money and includes only traveler’s checks, cash, and checking account balances
M1
A credit card is an ______ to the bank that issues it, but is a __________ to its holder.
asset
liability
hold checking and savings account deposits and include banks, credit unions, and S&Ls
Depository institutions
Contractual intermediaries
Insurance companies and pension funds
have no guaranteed value and no maturity date
stock
