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Flashcards in Ch 5 Deck (20)
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1
Q

imports

A

good and services purchased from other countries

2
Q

exports

A

goods and services sold to other countries

3
Q

Globalization

A

phenomenon of growing economic linkages among countries

4
Q

Hyperglobalization

A

phenomenon of extremely high levels of international trade

5
Q

comparative advantage

A

A country has * advantage in producing a good if the opportunity cost of producing the good is lower for that country than for other countries

6
Q

Ricardian model of international trade

A

analyzes international trade under the assumption that opportunity costs are constant

7
Q

Autarky

A

situation in which a country does not trade with other countries

8
Q

absolute advantage

A

Trade is based on * advantage

9
Q

factor intensity (of production of a good)

A

measure of which factor is used in relatively greater quantities than other factors in production

10
Q

Heckscher-Ohlin model

A

According to *, a country has a comparative advantage in a good whose production is intensive in the factors that are abundantly available in that country

11
Q

domestic demand curve

A

curve that shows how the quantity of a good demanded by domestic consumers depends on the price of that good

12
Q

domestic supply curve

A

curve that shows how the quantity of a good supplied by domestic producers depends on the price of that good

13
Q

free trade

A

an economy when the government does not attempt either to reduce or to increase the levels of exports and imports that occur naturally as a result of supply and demand

14
Q

trade protection (or simply protection)

A

policies that limit imports

15
Q

import quota

A

legal limit on the quantity of a good that can be imported

16
Q

international trademagreements

A

treaties in which a country promises to engage in less trade protection by other countries to do the same for its own exports

17
Q

World Trade Organization

A

oversees international trade agreements and rules on disputes between countries over those agreements

18
Q

North American Free Trade Agreement (NAFTA)

A

trade agreement among US, Canada, and Mexico

19
Q

European Union (EU)

A

customs union among 28 European Nations

20
Q

Difference in Climate
Differences in Factor Endowments
Differences in Texhnology

A

3 main sources of comparative advantage