Int'l Econ

Front 1

Trade

Back 1

Exchange, interchange, barter

Front 2

International trade

Back 2

Commercial transaction or exchange that occurs between two or more countries

Front 3

International Economics

Back 3

Deals with issues regarding problems of economic interactions, encompasses international transactions and exchange of goods as foreign assets

Front 4

International finance

Back 4

Focuses on monetary side of international economy or financial transactions such as buying and selling of international currencies

Front 5

International trade

Back 5

Exchange of capital good and services across international borders

Front 6

Bilateral trade

Back 6

Trade between two countries

Front 7

Multilateral trade

Back 7

Trade among many countries

Front 8

Czinkota, international trade

Back 8

Transactions devised and carried out accross national borders to satisfy individual and national objectives

Front 9

Adam Smith (1776)

Back 9

An inquiry into the nature and causes of the wealth of Nation

Front 10

Opportunity Cost

Back 10

Value of using a resource measured in terms of the value of the best alternative

Front 11

Comparative advantage/Factor endowment

Back 11

Lower opportunity cost, differences in capital, labour, land

Front 12

Absolute advantage

Back 12

Sole producer of an item, make something more cheaply than competitors

Front 13

Competition

Back 13

Growth, competition

Front 14

Access to capital/Greater returns on Capital

Back 14

Attract direct investment

Front 15

Economic and Social Development

Back 15

Increases economic and social development

Front 16

Cultural differences

Back 16

Deep cultural differences like social expectations

Front 17

Currency problem

Back 17

Financial complications because currencies are not of equal value

Front 18

Legal protection

Back 18

Protection by countries to encourage growth of domestic industries

Front 19

Foreign political climates

Back 19

Often unpredictable: terrorism

Front 20

Foreign business climates and methods

Back 20

Ethical problems in doing business: bribery

Front 21

Direct Exporting

Back 21

Soliciting orders from foreign countries for goods and services that are made in a country and shipped abroad

Front 22

Foreign Licensing

Back 22

Soliciting another country to produce and sell her product to them in a fee

Front 23

Imports serve domestic industry

Back 23

Some domestic industrial needs are only met by import

Front 24

Import serves domestic consumers

Back 24

Enlarges range of consumer choice of goods

Front 25

Exports are vital to many domestic producers

Back 25

Market for nations export is very important

Front 26

Exports serve as a foreign exchange earners

Back 26

Foreign exchange availability is essential requirement for the survival of any national income

Front 27

Exports Act as agent of growth

Back 27

Other countries demand for good produced act as a catalys for growth

Front 28

Mercantilism (Thomas Munn) 16th-18th century

Back 28

For a nation to become rich and powerful, it needs more export and less import

Front 29

Theory of Absolute Advantage (Adam Smith)

Back 29

Two nations, two commodities, one nation is more efficient than another in the production of one commodity. A nation can gain by specializing

Front 30

Theory of Comparative Advantage (Adam Smith, David Richardo, John Stuart Mill)

Back 30

Never attempt to make at home what it will cost him more to make than buy

Front 31

Neo-classical Theory of Trade (Haberler, 1936)

Back 31

Law of Comparative cost, a country has comparative advantage if opportunity cost is lower than other country

Front 32

The Rent for Surplus Theory

Back 32

Country carries out that surplus part of their land and labour which there is no demand

Front 33

The Theory of Factor Proportions

Back 33

Hecksher-Ohlin theory, a nation will export the commodity whose production requires the intensive use of the nations relatively abundant and cheap factor

Front 34

Competitive advantage of Nations

Back 34

Michael Porter, national prosperity is created, not inherited.

Front 35

Porter's country factors

Back 35

1. Factor conditions

2. Demand conditions

3. Related and supporting industries

4. Firm strategy, structure and rivalry

Front 36

Terms of trade

Back 36

Quantitative measure of the rate at which a country's export exchange for its imports

Front 37

Scarcity

Back 37

Relative amount of good available for trade

Front 38

Prebisch-Singer hypothesis

Back 38

Inflation could cause export to fall

Front 39

Commodity terms of trade

Back 39

Net Barter terms of trade. It is the ratio of the price index number of export to import

Front 40

Gross barter terms of trade (F.W. Taussig)

Back 40

Relative change in a country's volume of exports and imports against prices

Front 41

Balance of Trade

Back 41

Difference between visible imports and visible exports

Front 42

Tariff

Back 42

Tax imposed on imported good also called customs duty

Front 43

Production distortion loss

Back 43

Domestic producers produce too much of a good which can be purchased more cheaply abroad

Front 44

Consumption distortion loss

Back 44

Consumers consume too little of the good due to high domestic prices

Front 45

Import quota

Back 45

Limits quantity of imports to some level

Front 46

Limiting amount of foreign exchange

Back 46

Limiting foreign exchange

Front 47

Import ceiling

Back 47

Impose maximum amount of import

Front 48

Sanitary and phyto-sanitary measures

Back 48

Prerogative to protect life