Prentice Hall economics Chapter 17-18 – Flashcards
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Goods/Services that are produced and sold to other nations
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Exports
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Goods/Services that one country buys from another
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Imports
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One country can produce a product more efficiently than another
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Absolute advantage
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some countries focus on producing good/services that they are good at.
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Specialization
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when a country has the ability to produce a product relatively more efficiently, or at a lower opportunity cost
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Comparative advantage
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the best alternative when making a choice. It is what you didn't choose.
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opportunity cost
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a tax placed on imported goods
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tariff
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a tariff high enough to protect less efficient domestic industries
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protective tariff
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generates revenue for the government
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revenue tariff
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a specific limit or number of a product that can be imported
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quota
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we have certain standards that many products must meet to be imported
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standards
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support trade barriers to protect domestic companies
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protectionism
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supports little or no barriers to trade
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free trader
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new and emerging industries
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infant industries
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no trade with a nation--usually for political reasons
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embargo
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the difference between the money a country pays out to and receives from other nations
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balance of payments
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restrictive tariff, price increased nearly 70%, other nations retaliated
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Smoot-Hawley Tariff
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1934, reduced tariffs, contained most favored nation clause
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Reciprocal Trade Agreements Act
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North American Free Trade Agreement--1993 Lowered trade barriers between Canada, U.S., and Mexico
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NAFTA
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foreign currencies used to facilitate trade among nations
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Foreign Exchange
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the price of one country's currency in relation to anothers
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Foreign Exchange Rate
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a rate of exchange that doesn't change--commonly used when we operated on the gold standard
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Fixed Exchange Rates
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All currencies would have an actual gold value
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Gold Standard
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value set by supply and demand
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Flexible Exchange Rates
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value of products imported is greater than the value of goods exported
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Trade Deficit
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value of products imported is less than the value of goods exported
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Trade Surplus
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the value of the dollar is less than that of other countries, foreign goods are more expensive
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Weak dollar
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the value of the dollar is more than that of other countries, foreign goods are less expensive
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Strong dollar
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factory that usually pays low and has poor working conditions
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sweatshop
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does business--sales and manufacturing in different countries around the world
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Multinational Corporation
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a wage that will allow a person to live. It is different in different countries
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Living wage
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sending jobs/production to other countries
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outsourcing
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when governments provide $$ for industries to help them compete
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subsidies
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a regional trade organization made up of European nations
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European Union (EU)
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a single currency that replaces individual currencies among members of the EU
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euro
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an increase in the value of a currency
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appreciation
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a decrease in the value of a currency
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depreciation
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an association of nations dedicated to economic and political cooperation in southeastern Asia and who joined with the United States to fight against global terrorism
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ASEAN
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the process by which a nation improves the economic, political, and social well-being of its people
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development
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nation with a higher average level of material well-being
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developed nation
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nation with a low level of material well-being
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less developed country
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a nation's gross domestic product (GDP) divided by its total population
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per capita gross domestic product (per capita GDP)
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the extensive organization of an economy for the purpose of manufacture
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industrialization
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level of farming in which a person raises only enough food to feed his or her family
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subsistence agriculture
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the proportion of the population over age 15 that can read and write
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literacy rate
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the average expected life span of an individual
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life expectancy
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the number of deaths that occur in the first year of life per 1,000 live births
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infant mortality rate
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the services and facilities necessary for an economy to function
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infrastructure
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less developed country that has shown significant improvement in the measures of development
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newly industrialized country (NIC)
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the increase in a country's population in a given year, expressed as a percentage of the population figure at the start of the year
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population growth rate
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the difference between the birth rate and the death rate
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natural rate of population increase
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suitable for producing crops
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arable
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inadequate nutrition
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malnutrition
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financing derived from the savings of a country's citizens
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internal financing
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investment originating from other countries
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foreign investment
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the establishment of an enterprise by a foreigner
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foreign direct investment (FDI)
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the entry of funds into a country when foreigners make purchases in the country's stock and bond markets
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foreign portfolio investment
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the largest provider of development assistance
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World Bank
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United Nations program dedicated to elimination of poverty through development
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United Nations Development Program (UNDP)
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organization formed to stabilize international exchange rates and facilitate development
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International Monetary Fund (IMF)
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lengthening the time of debt repayment and forgiving, or dismissing, part of the loan
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debt rescheduling
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an agreement between a debtor nation and the IMF in which the nation agrees to revise its economic policy
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stabilization program
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the sale or transfer of state-owned businesses to individuals
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privatization
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system of values that gives central importance to work
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work ethic
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a policy of political "openness" introduced into the Soviet Union in the late 1980s
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glasnost
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Soviet leader Gorbachev's plan for economic restructuring
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perestroika
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the production of small consumer goods
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light industry
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designated regions in China where foreign investment is encouraged, businesses can make most of their own investment and production decisions, and foreign companies are allowed to operate
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special economic zones
