Macro Economics Mcconnell Brue 17 Chapter 5

Front 1

World Trade Organization (WTO)

Back 1

Organization of 149 nations that oversees the provisions of the current world trade agreement, resoles trade disputes stemming from it, and holds forums for further rounds of trade negotiations.

Front 2

Comparative Advantage

Back 2

A lower relative opportunity cost than that of another producer or country.

Front 3

Terms of Trade

Back 3

The rate at which units of one product can be exchanged for units of another product; the price of a good or service; the amount of one good or service that must be given up to obtain 1 unit of another good or service.

Front 4

Exchange Rates

Back 4

The rate of exchange of one nation's currency for another nation's currency.

Front 5

Depreciation

Back 5

A decrease in the value of the dollar relative to another currency, so a dollar buys a smaller amount of the foreign currency and therefore of foreign goods.

Front 6

Appreciation

Back 6

An increase in the value of the dollar relative to the currency of another nation, so a dollar buys a larger amount of the foreign currency and thus of foreign goods.

Front 7

Protective tariffs

Back 7

A tariff designed to shield domestic producers of a good or service from the competition of foreign producers

Front 8

Import quotas

Back 8

A limit imposed by a nation on the quantity of a good that may be imported during some period of time

Front 9

Nontariff barriers

Back 9

All barriers other than protective tariffs that nations erect to impede international trade, including import quotas, licensing requirements, unreasonable product quality standards, unnecessary bureaucratic detail in customs procedures, and so on.

Front 10

Export subsidies

Back 10

Government payments to domestic producers to enable them to reduce the price of a good or service to foreign buyers