Unit 15: The Global Economy Flashcards
the goods and services that it produces and sells to other nations
exports
the goods and services that the country buys from other countries
imports
when a country can produce a product more efficiently than another country can
absolute advantage
the ability to produce a product relatively more efficiently, or at a lower opportunity cost than another country
comparative advantage
a country has a ________ whenever the value of the product it imports exceeds the value of the products it exports in a given time
trade deficit
occurs whenever the value of a countrys export exceeds the value of its imports in a given time period
trade surplus
different currencies used to facilitate internationalo trade
foreign exchange
a rate at which one currency will be exchanged for another currency
exchange rate
-greater world output
-increased political stability
-faster economic growth
gains from trade
gov. policies which place restrictions on international trade
trade barriers
what are put into place to protect a nations economy?
trade barriers
a tax place on imports
tariff
what are tariffs paid to?
the customs authority
a limit placed on the quantities of a product that can be imported
quota
policies that permit inexpensive imports and exports without tariffs or other trade barriers
free trade
contractual arrangements between two or more countries concerning the obligations and protections of their trade relationships
trade agreements
signed on 1947 by 23 countries agreeing to extend tariff concessions and do away with quotas
General Agreement on Tarrifs and Trade GATT
an international agency, enforces trade agreements signed under GATT and settls trade disputes between natons
World Trade Organization WTO
the movement toward a more integrated and interdependent world economy
globalization
non-industrial nations marked by extremely low gross nation product (GNP), high poverty rates, and economic instability
developing countries
