globalisation and international trade Flashcards
Foreign direct investment
Movement of money flows that results in the acquisition of capital, such as new plants and equipment, or ownership and control of production facilities in a country
International trade
Refers to the exchange of goods and services between countries
Inter-industry trade
Refers to trade in products that belong to different industries
Terms of trade
Measures the rate of exchange of one good or service for another when two countries trade with each other
Horizontal intro-industry trade
International trade in different varieties of the same end-product of the same industry
Vertical intro-industry trade
Trade in parts/ components and finished products belonging to the same industry or sector
Open economy
An open economy is a market economy mostly free from trade barriers and where exports and imports form a ;argue percentage of the GDP
Protectionism
Refers to the partial or complete protection of domestic industries from foreign competition in domestic markets, and is achieved by setting up trade barriers
Tariffs
Taxes levied on products when they cross national boundaries (can be wither exports of imports)
Quotas
A limit to the quantity of a good that can be traded (can be imposed on both imports and exports)
Voluntary Export Restraints
Agreements between trading partners whereby the importing country persuades the exporter(s) to voluntarily restrain their exports
FTA
A trade bloc whose member countries have abolished all tariff barriers among themselves but maintain their individual tariffs against the outside world
Customs union
Like a free trade area, but in addition members must adopt common external tariffs and quotas with non-member countries
Common market
An arrangement by which member countries operate as a single market
