Definitions Flashcards

1
Q

appreciation

A

increase in the value of an asset (e.g. currency, real estate)

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2
Q

depreciation

A

decrease in the value of an asset (e.g. currency, real estate)

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3
Q

exchange rate

A

the value of one currency in another currency

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4
Q

foreign direct investment (FDI)

A

refers to the investment made by a company or individual from one country in another country

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5
Q

dumping

A

when a country exports products at a price lower than the production market value of the country of origin

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6
Q

quotas

A

restrictions set by the government on the quantity of imported goods

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7
Q

subsidy

A

financial aid provided by the government to domestic firms in order for them to be able to compete with foreign products

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8
Q

tariffs

A

when government imposes tax on imported goods

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9
Q

balance of payments (BOP)

A

record of all economic transactions between the resident of the country and resident of all other countries

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10
Q

current account

A

sum of trade balance, balance of income and balnce of current transfers (exported & imported goods, donation/aid/gift, rent, wage, interest)

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11
Q

capital account

A

composed inflows minus outflow of capital transfer & transactions in non-produced, non-financial assets (e.g. land, water, patent, copyright)

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12
Q

financial account

A

inflow minus outflow of funds for direct investment and portfolio investment

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13
Q

trade balance/BOT

A

inflow and outflow of all visible and invisible exports and imports

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14
Q

trade war

A

refers to a conflict between two or more countries due to each country imposing trade barriers on the other country’s exports (which can lead to major retaliations)

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15
Q

consumption

A

spending on goods and services by individuals or households

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16
Q

account deficit

A

a situation where the outflows of money on a component of the balance of payments are greater than the inflows

17
Q

trade deficit

A

when imports are greater than exports

18
Q

trade surplus

A

when exports are greater than imports

19
Q

administrative barriers

A

government laws or procedures that may
result in reduced trade

20
Q

trading bloc

A

a group of countries that have agreed to eliminate trade barriers to encourage free trade and cooperation between them

21
Q

preferential trade agreement

A

a group of countries that have agreed to lower trade barriers on a particular product in trade

22
Q

free trade area

A

a group of countries that agreed to demolish trade barriers between themselves

23
Q

custom union

A

a group of countries that fulfil the free trade area requirements and adopts common external policy towards non-members

24
Q

common market

A

group of countries that applies common external regulation and common product regulation.

25
Q

bilateral trade agreement

A

trade-related agreement between 2 countries

26
Q

multilateral trade agreement

A

trade-related agreement between 2 or more countries

27
Q

regional trade agreement

A

trade-related agreement between a group of countries

28
Q

economic integration

A

economic cooperation between countries that increases links between them

29
Q
A