Chapter 19 - International Trade Flashcards
What is the difference between a nation’s total exports and total imports?
A trade balance
What occurs when exports exceed imports?
A trade surplus
What occurs when imports exceed exports?
A trade deficit
What examines specialization, trade, gains from trade, and comparative advantage?
The trade model
Which model assumes two countries and two goods?
The trade model
What is absolute advantage?
It’s which product that you can produce the most of
What is comparative advantage?
It’s the product that your able to produce more of at a lower opportunity cost
What is often the result of foreign government subsidies rather than legitimate comparative advantage?
Dumping
What are taxes levied on imported goods and services?
Tariffs
What are limits on the quantity of products that can be imported into a country?
Import quotas
What states that domestic industries need trade protection until they are established and able to compete internationally?
The infant industry argument
What occurs when a foreign supplier sells a good below the price it charges in its home country?
Dumping
The U.S has had a trade defict since what year?
1975
What is the value of the opportunity lost?
Opportunity cost
