test 4 geo103 Flashcards
Inadequacies of trade theories
-simple assumptions
- do not consider scale economies
- failure to account for MNC’s
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Terms of Trade
prices received for exports relative to prices paid for imports
Competitive advantage
advantages over competitors derived from productivity growth and innovation
Depreciation
when the value of a currency decreases relative to another currency
appreciation
when the value of a currency increases relative to another currency
Foreign Direct investment
transfer of capital by a firm into a foreign business venture aimed at aquiring some control of the business venture
TNC
trans-national corporation
Where is FDI primarily concentrated?
The developing world
Benefits of FDI
- brings capital to host country
- technlogical transfer
- helps host country’s industrialization
- ## stimulates growth
Drawbacks to FDI
- labor exploitation
- profit repatriation
- uneven development
- loss of national sovereignty
protectionism
- when a country attempts to shield its industries from foreign competition through the use of tariffs or non-tariff barriers
tariffs
taxes or duties levied on products that cross national borders
Quotas
when countries place a limit on the number of imported goods of a particular type that can be imported during a year
subsidies
grants given by governments to help domestic producers
regional economic integration
transnational grouping of nations to form a single economic area
