Chapter 5 Flashcards
(24 cards)
The total dollar value of all goods and services produced in a nation for a year
GDP
List the four international linkages with United States
Trade flows
Resource flows
Information and technology flows
Financial flows
Too fast of growth is
Inflation
Too slow of growth is
Unemployment
The three factors that cause rapid trade growth
Transportation technology
Communication technology
General decline of Tariff
A tax on imported goods
Tariff
Why is specialization important for international trade
More efficient
Increases production
Higher standard of living
What is the basic rationale of international trade called
Comparative advantage
Rate of exchange from one nations currency for another nations currency
Exchange rate
Depreciation will cause what
Increase in imports and a decrease in exports
The value of the dollar goes up
Appreciation
The value of the dollar goes down
Depreciation
The four means by which governments commonly interfere with trade
Protective tariffs
Import quota
Nontariff barriers
Export subsidies
Limits on the quantities or the total value of specific items that may be imported
Import quotas
Government payment to domestic procedures of export goods
Export subsidies
Generous licensing requirements on reasonable standards pertaining to quality or red tape in custom procedures
Nontariff barriers
Excise taxes or duties placed on imported goods
Protective tariff
Started the downward trend of tariffs
Reciprocal trade agreement act
Stipulates that any subsequently reduced US tariffs would supply equally to any other nation
Most favored nation clauses
Tariff reductions through multilateral negotiation
GATT
Here’s an rules on trade disputes between nations
World trade organization
Reduction of trade barriers permits producers to produce maximum production economies
European Union
Mexico, United States, Canada – increased trade with those three countries
North American Free Trade Agreement
Because trade increased what in the US went up
Employment
