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19 Cards in this Set
- Front
- Back
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Markets |
A place where buyers and sellers come together to carry out an economics transaction |
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Demand |
Quantity of a good or service that consumers are willing and able to purchase at a given price in a given time period. |
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International Trade |
International trade is the exchange of goods and services between countries |
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Absolute Advantage |
A country is said to have an absolute advantage in the production of a good if it can produce it using fewer resources than another country |
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Reciprocal Absolute Advantage |
Recirprocal absolute advantage is where each country has an absolute advantage in the production of one product |
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Comparative Advantage |
A country is said to have a comparative advantage in the production of a good if it can produce it at a lower opportunity cost than another country |
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Tariff |
A tariff is a tax charged on imported goods. |
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Subsidy |
A subsidy is an amount of money paid by the government to a firm, per unit of output |
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Quota |
A quota is a physical limit on the number or value of goods that can be imported into a country |
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Economic Integration |
Economic integration is when countries coordinate and link their economic policies |
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Bilateral Trade Agreement |
A bilateral trade agreement aims to reduce or remove tariffs and/or quotas places on traded items between two countries |
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Multilateral Trade Agreement |
A multilateral trade agreement aims to reduce or remove tariffs and/pr quotas placed on traded items between multiple countries |
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Trading Block |
A trading block is when a group of countries join together to increase trade between only the member countries |
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Trade Creation |
Trade creation occurs when the entry of a country into the customs union leads to the production of goods or services transfering from high-cost producers to low-cost producers |
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Trade Diversion |
Trade diversion occurs when the entry of a country into a customs union leads to the production of goods or services transfering from a low-cost producer to a high-cost producer |
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Exchange Rate |
An exchange rate is the value of one currency expressed in terms of another currency |
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Manage Exchange Rate |
A manage exchange rate is where the currency is allowed to be afloat, but with some elements of government interference (upper and lower boundaries) |
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Fixed Exchange Rate |
A fixed exchange rate is where the value of a currency is fixed to the value of another currency. If the value of the currencie is raised it is called a revolation of the currency. If the value of the currency is lowered, it is called a devaluation of the currency |
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Floating Exchange Rate |
A floating exchange rate is where the value of a currency is determined by the demand and supply of the currency. If the value of the currency is raised, it is called a appreciation of the currecy. If the value of the currency is lowered, it is called a depreciation of the currency |
