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24 Cards in this Set

  • Front
  • Back
balance of trade
deficit/surplus
free trade
trade between countries without barriers or restrictions of any kind (no tariffs)
protectionism
put up barriers to trade, protect our industry
absolute advantage
when one country is better at making both goods
comparative advantage
when one country has an absolute advantage in everything, but would rather make one good than another, so trade occurs to save time
infant industry arguement
in favor of protectionism for young companies. give new companies government money so that they can compete in the market
subsidies
a government payment to support a business or market so they can compete
tariffs
taxes on imports designed to keep other countries out
revenue tariff
tax on imports designed to raise money for the government
protective tariff
tax on imports designed to keep other countries products out
non-tariff barrier
health standards and safety requirements
-protect us, keep products out
quotas
a limit on the number of products a country may sell in the US
embargo
ban on trade with a specific country
boycott
not buying a certain good
foreign exchange
trading with other countries
strong dollar
more imports, GNP down, move towards trade deficit
weak dollar
less imports, higher GNP, more towards trade deficit
GATT
-General Agreement on Trade and Tariff
-nations that wanted to encourage foreign trade by reducing barriers
-became WTO
WTO
-world trade organization
-encourage globalization, countries can sure each other
NAFTA
North American Free Trade Association
-US, Canada, and Mexico
EU
-European Union
-free trade zone in Europe, economically more efficient
globalization
the whole world is one market place, towards free trade, getting rid of barriers
problems with free trade
increase unemployment, lower enviornmental standards, lower wages, health risks, patents not protected, race to the bottom (sweatshops), cultural homogenization, union problems
problems with protectionism
political tension, decrease efficiency, decrease variety, higher prices