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T-EPF M2L4 Key Terms
Traditional EPF Module 2 Lesson 4 Key Terms
Term | Definition |
---|---|
Trade | The exchange of goods between countries. |
Absolute Advantage | The ability of a country to produce something more efficiently than another. |
Comparative Advantage | The ability of a country to produce something at a lower opportunity cost than another country. |
Exchange Rates | The value of a country’s currency in terms of another country’s currency. |
Balance of Trade | The difference between the value of a country’s imports and exports. |
Tariff | A tax on imported goods. |
Quotas | Limits on the number of goods imported from other countries. |
Embargo | Cutting off trade with another country. |
Free Trade | When countries trade without tariffs or restrictions. |
Market Economy | These are also called capitalist economies. It is an economic system in which citizens own the factors of production. In a market economy, supply (what producers offer for sale) and demand (what consumers are able and willing to buy) determine what producers produce and how much they produce. |
Traditional Economy | An economic system in which people do things the way they have always been done which emphasizes the trading and bartering of products and services. |
Import | To buy goods from other countries. |
Export | To sell goods to other countries. |
Trade Surplus | When the value of a country’s exports is greater than its imports. |
Trade Deficit | When the value of a country’s imports is greater than its exports. |
Developed Nation | A nation with a higher GDP that is able to meet its country’s needs by engaging in international trade. |
Developing Nation | A nation with a lower GDP that struggles to meet its country’s needs; typically engages in agriculture as a primary economic activity. |