Exam 1 Flashcards
foreign direct investment (FDI)
purchase of physical assets by a foreign company or individual -> Chinese trolleys in Boston
trade to GDP ratio formula
(exports + imports) / GDP
transaction costs
legal, marketing, insurance costs (additional costs)
3 pieces of evidence for global trade
empirical historical evidence, evidence based on economic models and deductive reasoning, statistical comparisons of other countries
International Monetary Fund (IMF)
lender of last resort
World Bank
assists in development
World Trade Organization
trade policies and discussions
how economists measure globalization
world trade, intl. capital flows, intl. migration flows, price similarities
who is the world’s largest consumer market
the US
what are limits on utility?
time and scarcity (like a budget constraint)
national treatment
once a good is in your country, you don’t treat it any differently
nondiscrimination
national laws should not treat foreign firms different from domestic firms
nonexcludable
everyone benefits even if they don’t pay
nonrival / nondiminishable
not reduced by consumption (radio broadcast, youtube video)
Doha Round
current round of negotiations, emphasis on developing countries, according to book not successful
foreign exchange reserves
foreign assets held to settle foreign payments
free trade area
free movement of outputs across borders within group
MFN
treating all trading partners as you treat your most favored trading partner
trade bloc
tariffs to outside nations
public goods
nonexcludable and nonrival
autarky
0 foreign trade
competitive advantage
selling a good at the lowest price
economic restructuring
a movement from one point to another along a country’s ppc
relative price
price of one good in terms of another
zero sum
costs and benefits of an activity cancel each other
taa - trade adjustment assistance
gov. assistance programs for workers because of foreign trade or jobs moving abroad
relative abundance
a factor’s relative cost is less than in countries where this factor is relatively scarce
derived demand
demand for a good or service that is derived from demand for something else
foreign affiliate
foreign-based operation owned by a firm in the home country
off-shoring
movement of some or all of a firm’s activities to a different country
quota rents
excess profits earned by foreign producers
antidumping duty
a tariff levied on an import that is selling at a price below the product’s fair value
countervailing duties
tariff imposed because trading partner (foreign form) has been engaging in unfair subsidies
escape clause relief
harmful surge in inputs
section 301 retaliation
USTR unfair trading practices
