International Definitions Flashcards

1
Q

Define free trade.

A

Trade of goods and services between countries without restrictions or government intervention.

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2
Q

Define tariffs.

A

Taxes imposed on goods and services imported from a foreign country

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3
Q

Define quota.

A

A legal limit to the quantity of a good that can be imported over a particular time, usually a year

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4
Q

Define production subsidies.

A

Money paid to domestic firms per unit of output regardless of where the goods and services are sold

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5
Q

Define export subsidies.

A

Money granted to domestic producers only for the units that they export to foreign countries

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6
Q

Define administrative barriers.

A

Obstacles that prevent imports, e.g. health and safety regulations, red tape, technical standards

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7
Q

Define floating exchange rate.

A

The value of one currency expressed in term of another, whose value is determined by demand and supply with no government intervention

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8
Q

Define fixed exchange rate.

A

The value of one currency expressed in terms of another, whose value is fixed or pegged by monetary authority

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9
Q

Define trading blocs.

A

Groups of countries that agree to reduce trade barriers for freer trade and cooperation.

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10
Q

Define free trade area.

A

Agreement to eliminate trade barriers on certain goods and services (e.g. NAFTA)

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11
Q

Define customs union.

A

Free trade area + common trade policies on non-member countries

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12
Q

Define common market.

A

Customs union + further eliminate trade barriers between member countries for free flow of FOP (EAC)

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13
Q

Define monetary union.

A

Common market + adopt common currency, central bank, and monetary/exchange rate policies, coordinate macroeconomic policies (e.g. the EU)

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