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Macroecon > Chapter 4 > Flashcards

Chapter 4 Flashcards

1
Q

Trade

A

When goods, services or resources are exchanged

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2
Q

Barter

A

Trade without money

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3
Q

Incentives to Trade

A
  • People differ in tastes
  • People differ in abilities
  • More highly populated markets give rise to better use of resources through specialization
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4
Q

Comparative Advantage

A

Having a lower opportunity cost of producing a good, in terms of other goods sacrificed

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5
Q

Transactions Costs

A

Sacrifices made in order to search out, negotiate, and complete an exchange

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6
Q

Balance of Trade (as pertaining to mercantilists)

A

the dollar value of exported good - the dollar value of imported goods

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7
Q

Trade Surplus

A

Positive Balance of trade

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8
Q

Trade Deficit

A

Negative Balance of Trade

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9
Q

The Current Account

A

The monetary value of the flow of GOODS and SERVICES

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10
Q

The Capital Account

A

The monetary value of the flow of STOCKS and BONDS

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11
Q

Exchange Rate

A

The price of one country’s currency in terms of another country’s currenct

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12
Q

Modern Day Mercantilists are known as…..

A

Protectionists

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13
Q

Tariff

A

Tax on imports

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14
Q

Quota

A

Restrictions on quantities of imports people can buy

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15
Q

Subsidies

A

Government paying domestic firms to produce

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16
Q

Export Subsidies

A

Government paying domestic firms to export

17
Q

Domestic Content Restriction

A

Laws that say a product made in the country must be made with resources from the country

18
Q

Anti-Competitive Manufacturing Specifications

A

Requiring that a particular imported product be manufactured with inputs that are difficult to acquire except in the importing country

19
Q

Division of labor is limited by

A

the market

20
Q

Internal Cost

A

What is given up in production in terms of another good

21
Q

External Cost

A

Given up in trade

Macroecon (19 decks)

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