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10 Cards in this Set

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  • Back

International Trade

Purchase sale or exchange of goods and services across national borders


states that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports

Absolute Advantage

Smith- the ability for one country to carry out an economic activity more efficiently than others

Comparative Advantage-

Ricardo- the ability of a country to carry out a particular economic activity more efficiently than another activity

Factor proportions theory-

Hecksher- states that countries produce and export goods that require resources (factors) that are abundant and imports goods that require resources in short supply

International product life cycle

theory states that a company will begin by exporting its product and later undertake foreign direct investment as the product moves through its life cycle.

new trade theory

krugman- 1) there are gains to be made from specialization and increasing economics scale

2) the companies first to market can create barriers to entry

3) government may play a role in assisting its home companies

National competitive advantage

theory states that a nations competitiveness in an industry depends on the capacity of the industry to innovate and upgrade

Porters diamond

1) Factor conditions

2) Demand Conditions

3) Related and supporting industries

4) Firm Strategy, structure, and rivalry

zero sum game

mercantalist nations believe that the worlds wealth was limited and that a nation could increase its share of a pie only at the expense of its neighbors