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Macro-Economics
Vocabulary Chap 17
| Question | Answer |
|---|---|
| Exports | goods and services a nation produces and sells to other nations |
| Imports | goods and services that one country buys from other countries |
| Absolute Advantage | when a country can produce a good more efficiently |
| Comparative Advantage | the ability to produce a product relatively more efficiently or at a lower opportunity cost |
| Tariff | a tax placed on imports to increase their price in the domestic market |
| Quota | a limit placed on the quantities of a product that can be imported |
| Protective Tariff | a tariff high enough to protect less-efficient domestic industries |
| Revenue Tariff | a tariff high enough to generate revenue for the government without actually prohibiting imports. |
| Dumping | selling products abroad at less than the cost to produce them at home |
| Protectionists | people that favor trade barriers that protect domestic industries |
| Free Traders | people that favor few or no trade restrictions |
| Infant Industries Argument | the belief that new or emerging industries should be protected from foreign competition |
| Balance of Payments | the difference between the money a country pays out to, and receives from, other nations when it engages in international trade |
| Most Favored Nation Clause | part of United States law that allows a favored nation to receive the lowest possible tariff |
| Word Trade Organization | an international organization focused on administering treaties, settling trade disputes, and providing training for developing nations |
| North American Free Trade Agreement | An agreement between United States, Canada, and Mexico to liberalize trade by reducing tariffs |
| Foreign Exchange | foreign currencies used to facilitate international trade |
| Foreign Exchange Rate | the price of one country's currency in terms of another country's currency |
| Fixed Exchange Rates | a system in which the price of one currency is fixed in terms of another so that the rate does not change |
| Flexible Exchange Rates | supply and demand determine the value of one country's currency in terms of another's country's currency |
| Trade Deficit | when the value of the products a country imports exceeds the value of the products it exports |
| Trade Surplus | when the value of a country's exports exceeds the value of its imports |
| Trade-Weighted Value of the Dollar | index showing the strength of the dollar against a group of foreign currency |
Created by:
kvanolson
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