Module 3 Vocabulary

Question 1

An order of a government prohibiting the departure of commercial ships from its ports

Answer 1

Embargo

Question 2

One of the earliest economic theories, which stated that a country’s wealth was determined by the amount of gold and silver they had in their possession

Answer 2

Mercanilism

Question 3

A commodity, good, or service sold abroad

Answer 3

Export

Question 4

Bringing goods or services into the country from abroad for the purpose of selling

Answer 4

Import

Question 5

When the value of a country’s exports is greater than the value of goods being imported

Answer 5

Trade surplus

Question 6

The theory or practice of protecting a country’s domestic industries from foreign competition by taxing imports

Answer 6

Protectionism

Question 7

Money paid by the government to help an organization or industry reduce its costs

Answer 7

Government subsidies

Question 8

International trade left to its natural course without tariffs, quotas, or other restrictions

Answer 8

Free trade

Question 9

The loss of potential gain from other alternatives when one alternative is chosen

Answer 9

Opportunity cost

Question 10

A proportionate savings in costs gained by an increased level of production

Answer 10

Economies of scale

Question 11

Focuses on multinational corportations

Answer 11

Global strategic rivalry theory

Question 12

Proposes intra-industry trade will be standard

Answer 12

Country similarity theory

Question 13

Based on a countries natural resources

Answer 13

Factor endowment theory

Question 14

Taxes on goods that are imported into a country

Answer 14

Import tariffs

Question 15

Taxes on goods leaving a country

Answer 15

Export tariffs

Question 16

Tariffs that protect a domestic industry by making imported goods more expensive than equivalent goods produced domestically

Answer 16

Protective tariffs

Question 17

Tariffs levied to raise revenue for the government

Answer 17

Revenue tariffs

Question 18

Import taxes expressed in an amount of money per unit imported

Answer 18

Specific tariffs

Question 19

Import taxes based on a fixed percentage of the assessed commercial value of imported goods

Answer 19

Ad-valorem tariffs

Question 20

Taxes on imported goods that are a combination of a fixed amount and an amount based on the value of the goods

Answer 20

Compound tariffs

Question 21

A quota that strictly limits the quantity of goods that may enter a country.

Answer 21

Absolute quota

Question 22

A quota that permits a specified quantity of imported goods to enter a country at a reduced rate during the quota period.

Answer 22

Tariff-rate quota

Question 23

A trade restriction on the quantity of a good that an exporting country is allowed to export to another country

Answer 23

Voluntary export restrictions

Question 24

The process of buying goods and services by a government agency through a specific process of issuing bid proposals and seeking responses from companies.

Answer 24

Government procurement programs

Question 25

A political or economic system that becomes self-sufficient to survive.

Answer 25

Autarky