Module 5 International Trade & Foreign Exchange Markets- Vocab Flashcards
Appreciation
Also called “strengthening” the situation of a currency being able to buy more of another currency.
Depreciation
Also called “weakening” the situation of a currency being able to purchase less of another currency.
Dumping
Selling goods below their cost of production in non-domestic markets.
Embargo
A protection policy that prevents all imports of a particular good.
Exchange rate
The price of a currency in terms of another currency in a foreign exchange market.
Floating exchange rates
Exchange rates determined by the supply and demand of countries’ currencies.
Foreign exchange market
The market in which currencies of different countries are bought and sold.
Free trade
International trade occurring among countries without trade barriers or protection measures.
Import quotas
Numerical limitations on the quantity of products that a country can import.
Infant industry argument
The blocking of imports for a limited time to give an emerging domestic industry time to mature before it starts competing on equal terms in the global economy.
Non-tariff barriers
Measures such as such as rules, regulations, inspections, and paperwork used by countries to make it more costly or difficult to export products into that country.
Protection policy
Government policy implemented with the purpose to impede or block trade from another country
Purchasing Power Parity
The theoretical exchange rate at which a person can buy the same amount of goods and services with another currency.
Race to the bottom
Scenario describing multinational companies shifting production from countries with strong environmental standards to countries with weak environmental standards.
Tariffs
Taxes that governments impose on imported goods and services.
