Chapter 4 Flashcards
globalization
process by which the world economy is becoming a single interdependent system
import
product made or grown abroad but sold domestically
export
product made or grown domestically but shipped and sold abroad
North American Free Trade Agreement (NAFTA)
agreement to gradually eliminate tariffs and other trade barriers among the United States, Canada, Mexico
European Union (EU)
organization for economic, social, and security cooperation among European nations
Association of Southeast Asian Nations (ASEAN)
organization for economic, political, social, and cultural cooperation amond Southeast Asian nations
general agreement on tariffs and trade (GATT)
international trade agreement to encourage the multilateral reduction of elimination of trade barriers
World Trade Organization (WTO)
organization through which member nations negotiate trading agreements and resolve disputes about trade policies and practices
balance of trade
economic value of all products a country exports minus the economic value of all products it imports
trade deficit
situation in which a country’s imports exceed its exports, creating a negative balance of trade
trade surplus
situation in which a country’s exports exceed its imports, creating a positive balance of trade
balance of paymnets
flow of money into or out of a country
exchange rate
rate at which the currency of one nation can be exchanged for the currency of another nation
euro
common currency shared among most of the members of the European Union (excluding Denmark, Sweden, and the United Kingdom)
absolute advantage
abiltiy to produce something more efficiently than any other country
