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24 Cards in this Set

  • Front
  • Back
the value of goods and services sold to foreigners
exports
the value of goods and services purchased from foreigners
imports
the value of a nation's exports minus its imports
trade balance
the amount by which a nation's trade balance is in deficit (imports exceed exports)
trade deficit
the amount by which a nation's trade balance is in surplus (exports exceed imports)
trade surplus
a situation whereby a country can produce a good at a lower resource cost than another country
absolute advantage
a curve that shows alternative combinations of the maximum amounts of two products that can be consumed within a country during a particular time period
consumption possibilities curve
a restriction on the quantity of an imported good
quota
a tax on an imported good
tariff
a situation in which one country responds to the trade restrictions of another country by imposing trade restrictions of its own
retaliation
demand in which buyers are relatively unresponsive to changes in price
inelastic demand
a situation in which the price of a country's exports declines relative to the price of its imports
declining terms of trade
restrictions on trade with another country for political reasons
embargo
an agreement between the United States, Canada, and Mexico allowing more equal access to one another's markets. The agreement went into effect on January 1, 1994
North American Free Trade Agreement (NAFTA)
an international trade agreement, first negotiated in 1947, that has included efforts to reduce tariff barriers among member countries of the world. It is now replaced by the World Trade Organization
General agreement on tariffs and trade (GATT)
the organization that replaced GATT in 1995 and continues to pursue GATT's agenda to reduce barriers to trade among member countries
World Trade Organization (WTO)
the price of one country's currency in terms of another country's currency
exchange rate
a system whereby exchange rates are determined on te basis of international demand and supply for a currency
flexible (floating) exchange rate system
an increase in the value of one country's currency relative to another country's currency
appreciate
a decrease in the value of one country's currency relative to another country's currency
depreciate
a group of eight countries (the U.S., Canada, Britain, France, Italy, Germany, Japan, and Russia) that coordinate policies in an effort to influence exchange rates
Group of Eight (G-8)
a group of six (original) countries (the U.S., Japan, China, Singapore, Australia, and Hong Kong) that coordinate financial policies
Six Markets Group (Asian G-6)
a situation whereby a country can produce a good at a lower opportunity cost than another country
comparative advantage
unprocessed raw material and agricultural products
primary commodities