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Unit 5:Growth LTran
Macroeconomics
Question | Answer |
---|---|
Human Capital | The knowledge and skills that make a productive worker. |
Physical Capital | Tangible asset that is created by humans and used production. |
Balance of Trade (Balance on Goods and Services) | The difference between U.S exports of goods and services and U.S imports of goods and services. |
Balance of Payments | The sum of all the payments a nation receives from foreign countries and all the payments it makes to them. |
Current Account | The section in a nation's international balance of payments that records its exports and imports of goods and services, its net investment income and its net transfers |
Capital Account | The section of a nation's international balance-of-payments statement that records the foreign purchases of assets in the United States (creating monetary inflows) and U.S. purchases of assets abroad. |
Foreign Exchange Market (AD/AS) | A market in which the money (currency) of one nation can be used to purchase (can be exchanged for) the money of another nation. |
Comparative Advantage | A lower relative or comparative cost than that of another producer. |
Absolute Advantage | The ability of an economic actor (an individual, a household or a firm) to produce some particular good or service with a smaller total input of economic resources (labor, capital, land, etc.) per unit of output than other economic actors. |
Currency Appreciation | An increase in the value of a nation's currency in foreign exchange markets. |
Currency Depreciation | A decrease in the value of a nation's currency in foreign exchange markets. |
Capital Flows | AKA resource flows; U.S firms establish production facilities in foreign countries and labor flows between nations. |
Factors of Growth (Supply, Demand, Efficiency) | Supply: increases in natural and human resources, increase of capital, improvements in technology. Demand: govt purchase economy's output of goods Efficiency: Use resources cost efficiently to maximize peoples' happiness. |
Labor Productivity | Real GDP/ hours of work |
Infrastructure | A system of public works in a city, state, nation e.g. freeways, schools, water systems |
Terms of Trade | Determined by value of trading nation's currency |
Trade Barriers (Tariffs and Import Quotas) | Tariffs: excise taxes on imported goods. Import Quota: specific max amount of a commodity that may be imported in any period. |
Trade Barriers (NTB and VER) | Non-tariff barrier: licensing requirement that specifies standards pertaining to product quality and safety. Voluntary Export Restriction: foreign firms "voluntarily" limit the amount of their exports to a particular country. |