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21 Cards in this Set

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Balance of payments

a record of the value of all the transactions between the residents of onecountry and the residents of all other countries in the world in a given time period

Current account

measure of the flow of funds from trade in goods and services, plus otherincome flows

Foreign Direct Investment

the buying and selling of a minimum of 10% of a company's sharesby a foreign investor in the domestic economy or by a domestic investor in another nation's economy

Balance of trade

in goods measure of the revenue received from the export of tangible goodsminus the expenditure on the imports of tangible goods over a given time period

Remittances

when foreign workers send money back to families in their home country

Current transfers

(net unilateral transfers) measurement of the net transfers of money,payments made between countries when no goods or services change hands

Net investment income

(net factor income from abroad) measure of the net monetary movementfrom profit, interest and dividends moving into and out of a country over a given time period as a result of financial investment abroad

Appreciation

if the blue of the currency in a floating exchange rate regime rises

Depreciation

If the value of the currency in a floating exchange rate regime falls

Revaluation

if the value of the currency, in a fixed exchange rate regime, is raised

Devaluation

if the value of the currency, in a fixed exchange rate regime, is lowered

Trade diversion

when the entry of a country into a customs union leads to the production of agood or service transferring from a low-cost producer to a high-cost producer

Trade creation

when the entry of a country into a customs union leads to the production of agood or service transferring from a high-cost producer to a low-cost producer

common market

a regional trade agreement whose member nations allow the free movement of inputs as well as outputs, and who share a common external tariff toward nonmembers

economic union

he most complete form of economic integration, these unions are common markets that also harmonize many standards while having the same substantially similar fiscal and monetary policies. Economic unions may include a common currency.

foreign direct investment (FDI)

the purchase of physical assets such as real estate or businesses by a foreign company or individual. It can be outward or inward.

free-trade area

a preferential trade agreement in which countries permit the free movement of outputs across their borders as long as the outputs originate in one of the member countries

gross domestic product (GDP)

the market value of all final goods and services produced in a year inside a nation

opportunity cost

the value of the best forgone alternative to the activity actually chosen

According to the chart, what is the reason for the increase in trade between the US and Mexico?

A)GATT


B)NAFTA


C)NATO


D)WTO

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