Chapter 21 Flashcards
Goods and services sold to foreign buyers
Exports
The amount by which the value of inputs exceeds the value of exports in a given time
Trade deficit
The amount by which the value of exports exceeds the value of imports in a given time
Trade surplus
The alternative combinations of final goods and services that could be produced in a given time period with all available resources and technology
Production possibilities
A nation that doesn’t engage in international trade
Closed economy
The alternative combinations of goods and services that a country could consume in a given time period
Consumption possibilities
A nation that engages in international trade
Open economy
The ability of a country to produce a specific good at a lower opportunity cost than its trading partners
Comparative advantage
The most desired goods or services that are forgive in order to obtain something else
Opportunity cost
The ability of a country to produce a specific good with fewer resources (per unit of output) than other countries
Absolute advantage
The rate at which goods are exchanged; the amount of good A given up for good B in trade
Terms of trade
The sale of goods in export markets at prices below domestic prices
Dumping
A prohibition on exports or imports
Embargo
A tax (duty) imposed on imported goods
Tariff
A limit on the quantity of a good that may be imported in a given time period
Quota
