Unit 15: The Global Economy

Question 1

the goods and services that it produces and sells to other nations

Answer 1

exports

Question 2

the goods and services that the country buys from other countries

Answer 2

imports

Question 3

when a country can produce a product more efficiently than another country can

Answer 3

absolute advantage

Question 4

the ability to produce a product relatively more efficiently, or at a lower opportunity cost than another country

Answer 4

comparative advantage

Question 5

a country has a ________ whenever the value of the product it imports exceeds the value of the products it exports in a given time

Answer 5

trade deficit

Question 6

occurs whenever the value of a countrys export exceeds the value of its imports in a given time period

Answer 6

trade surplus

Question 7

different currencies used to facilitate internationalo trade

Answer 7

foreign exchange

Question 8

a rate at which one currency will be exchanged for another currency

Answer 8

exchange rate

Question 9

-greater world output
-increased political stability
-faster economic growth

Answer 9

gains from trade

Question 10

gov. policies which place restrictions on international trade

Answer 10

trade barriers

Question 11

what are put into place to protect a nations economy?

Answer 11

trade barriers

Question 12

a tax place on imports

Answer 12

tariff

Question 13

what are tariffs paid to?

Answer 13

the customs authority

Question 14

a limit placed on the quantities of a product that can be imported

Answer 14

quota

Question 15

policies that permit inexpensive imports and exports without tariffs or other trade barriers

Answer 15

free trade

Question 16

contractual arrangements between two or more countries concerning the obligations and protections of their trade relationships

Answer 16

trade agreements

Question 17

signed on 1947 by 23 countries agreeing to extend tariff concessions and do away with quotas

Answer 17

General Agreement on Tarrifs and Trade GATT

Question 18

an international agency, enforces trade agreements signed under GATT and settls trade disputes between natons

Answer 18

World Trade Organization WTO

Question 19

the movement toward a more integrated and interdependent world economy

Answer 19

globalization

Question 20

non-industrial nations marked by extremely low gross nation product (GNP), high poverty rates, and economic instability

Answer 20

developing countries