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Flashcards in Chapter 8 Vocab Deck (18):
0

Goods bought from other countries for domestic use.

Imports

1

Goods sold to other countries.

Exports

2

Ability of one country, using the same quantity of resources as another country, to produce a particular product at a lower absolute cost.

Absolute advantage

3

Concept that a nation should produce and export a limited assortment of goods for which it is particularly suited in order to remain profitable.

Specialization

4

Ability of a country to produce a product at a lower opportunity cost than another country.

Comparative advantage

5

The price of one nations currency in terms of another nations currency

Exchange rate

6

Markets dealing in buying and selling foreign currency for businesses that want to import goods from other countries.

Foreign exchange markets

7

System under which a national government sets the value of its currency in relation to a single standard.

Fixed rate of exchange

8

Agency whose member governments once were obliged to keep their foreign exchange rates more or less fixed; today it offers monetary advice and provides loans to developing nations.

International Monetary Fund (IMF)

9

Lowering a currency's value in relation to other currencies by government order

Devaluation

10

Arrangement in which the forces of supply and demand are allowed to set the price of various currencies.

Flexible exchange rates

11

Difference between the value of a nations exports and its imports.

Balance of trade

12

Tax placed in an imported product/

Tariff

13

Tax on imports used to raise the cost of imported goods and thereby protect domestic producers.

Protective tariff

14

Restriction imposed on the value of or on the number of units of a particular good that can be brought into the country.

Import quota

15

Complete restriction on the import or export of a particular good.

Embargo

16

People who argue for trade restrictions to protect domestic industries.

Protectionists

17

Trade agreement under which countries met periodically i negotiate tariff reductions that were mutually advantageous to all members.

General agreement on tariffs and trade (GATT)