International economic issues (AS level) Flashcards
Factor endowment
the availability of capital, enterprise, labour and land in an economy
Absolute advantage (international trade)
a situation where, for a given set of resources, one country can produce more of a particular product than another country
Opportunity cost ratio
the quantity of one product compared to the quantity of another product that has to be sacrificed to produce it.
Comparative advantage (international trade)
a situation where a country can produce a product at a lower opportunity cost than another country
Free trade
international trade not restricted by taxes on imports and other policy tools designed to give domestic producers protection from competition from imports
Trading possibility curve
a diagram showing the effects of a country specialising and trading
Imports
goods and services purchased from other countries
Exports
goods and services sold to other countries
Terms of trade
a numerical measure of the relationship between export and import prices
Protectionism (international trade)
protecting domestic producers from foreign competition
Tariff
a tax imposed on imports. Sometimes tariffs may be imposed on exports
Absolute poverty
a condition where people’s income is too low to enable them to meet their basic needs
Quota
a limit on imports
Embargo
a ban on imports and/ or exports
Voluntary export restraint
a limit placed on imports reached with the agreement of the supplying country
Exchange control
restrictions on the purchases of foreign currency
Infant industries
new industries that have a low output and a high average cost
Dumping
selling product in a foreign market at below their cost of production
Monopoly
where one firm dominated the market due to having a large market share; a pure monopoly is a single seller with 100% market share
Current account
a record of the trade in goods, trade in services, primary income and secondary income
Dividend payments
a share of a firm’s profits paid to its shareholders
Exchange rate
price of one currency in terms of another currency
Balance of payments account
a record of a country’s economic transactions with the rest of the world over a year
Capital account
within the balance of payments, a record of the sale of purchase of copyrights, patents, trademarks, and money brought into the country by immigrants and taken out by emigrants
