International trade

Question 1

The ability of an individual, company or country to produce a good or service at a lower cost than any competitor; the ability to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources.

Answer 1

ABSOLUTE ADVANTAGE

Question 2

Trade in tangible goods

Answer 2

VISIBLE TRADE (GB) OR MERCHANDISE TRADE (US)

Question 3

Trade in services (banking, insurance, tourism and so on)

Answer 3

INVISIBLE TRADE

Question 4

Direct exchanges of goods, without the use of money

Answer 4

BARTER OR COUNTER-TRADE

Question 5

The difference between the money that a country receives for its visible exports (goods) and pays for its visible imports (goods)

Answer 5

BALANCE OF TRADE

Question 6

The difference between a country’s total earnings from exports and its total expenditure on imports

Answer 6

BALANCE OF PAYMENTS

Question 7

The situation in which a country is completely self-sufficient and has no foreign trade

Answer 7

AUTARKY

Question 8

A positive balance of trade or payments

Answer 8

TRADE SURPLUS

Question 9

A negative balance of trade or payments

Answer 9

TRADE DEFICIT

Question 10

Selling goods in foreign markets at a lower price than in the home market, or even selling at cost price or at a loss in order to obtain foreign exchange

Answer 10

DUMPING

Question 11

Imposing trade barriers in order to restrict imports and increase the sales of domestic products

Answer 11

PROTECTIONISM

Question 12

Taxes charged on imports (to raise the price of foreign goods thus protecting the home production)

Answer 12

TARIFFS

Question 13

Quantitative limits on the import of particular products or commodities

Answer 13

QUOTAS

Question 14

A situation where there are no restrictions on imports and exports of goods

Answer 14

FREE TRADE

Question 15

The belief that all nations will raise their living standards and real income if they specialize in the production of those goods and services in which they have the highest relative productivity

Answer 15

COMPARATIVE COST PRINCIPLE

Question 16

A relative advantage that one country has over some, but not all, other countries because it is better at producing particular goods; the ability of an individual, company, or country to produce a good or service at a lower opportunity cost than its competitor

Answer 16

COMPARATIVE ADVANTAGE

Question 17

The ending or relaxing of legal regulations or restrictions in a particular industry

Answer 17

DEREGULATION

Question 18

The total annual value of a country’s goods and services

Answer 18

GDP (Gross domestic product)

Question 19

The attempt to reduce imports by producing goods domestically

Answer 19

IMPORT SUBSTITUTION

Question 20

The belief that the economy works best when the state does not interfere

Answer 20

LAISSEZ-FAIRE

Question 21

An industry in its early stages of development in a particular country

Answer 21

INFANT INDUSTRY

Question 22

An industry that a country considers very important for its economic development

Answer 22

STRATEGIC INDUSTRY

Question 23

Money that is paid by a government or an organization to financially help producers with the cost of home-produced goods so that they can sell them at a lower price abroad

Answer 23

SUBSIDIES

Question 24

An outright ban on imports

Answer 24

EMBARGO