Trade Flashcards
Tariffs
Tax on traded goods
Comparative Advantage
Ability to produce a product most efficiently given all other products that could be produced
Specialization
Given reourcses, countries produce what they can with a given set of resources, at a lower oppertunity cost than another country
Globalization
Changes in world economy form dramaticaly increased international trade and cultural exchanges
North AMerican Free Trade Agreement
(NAFTA)
Eliminate tariffs and other trade barriers between Canafa, Mexico, USA
European Uninon
Regional trade orginization made of European nations
Two trends of globalization
Pro-Globalization
Anti-Globalization
Why do countries trade
benifit with higher standard of living
World Trade Orginaztion
Worldwie orginzation with goal of freer global trade and lower tariffs
Effect of Barriers on Consumers
Prices could raise
Anti-Globalization Argument
Called: Critics of Globalization
Globalization is unpredictable and a number of collaterals have emerged
What did David Ricardo proposed
interested in why countries trade & higher standards of living
Quota
A limit on amount of goods and services imported
3 types of barriers
tariffs
quota
embargo
Trade Barrier
Barrier that restricts law of international goods and services
Like restricting trade for health or saftety reasons
(crayons from china that contained lead)
Embargo
Ban on trade or other commercial activity w/ a particular country
Effect of Trade Barriers on Workers
Could gain jobs in one field but loose jobs in other fields
Ex: higher price for stell=Steel manufactures could gain, but people having to use steel would losse jobs
What is not distibuted equally around the world
Resources
Absolute Advantage
Ability to produce more or a given product using a given amount of resources
Effect of Trade Barriers on Manufactures
Trade barreiers limit supply that helps manufactures that raise prices
Pro-Globalization
Supporters of free-trade-states comparative advantage is more efficent use of resources benefcial to most
Collateral
something Security related for payment of loan, to be forfeited in the event of defult
How do countries decide what to produce
By their land labor and capitol resources
