Econ unit 4 Flashcards
(24 cards)
Globalization
The creation of a world economy caused by increased international trade, investment flows and the spread of multinational corporations
Absolute Advantage
The rapacity of one’s economy to produce a good or a service with fewer resources than another
Comparative Advantage
The capacity of one economy to produce a good or service with comparatively fewer resources than another.
Terms of Trade
The rate at which a country’s exports are exchanged for its imports.
Dumping
The deliberate practice of selling a product internationally at a price lower than its domestic price
Tariff
A tax on an import levied by a nation also called a custom duty
Sanctions
Restrictions on trade with one country levied by another for some political purpose
embargo
An action taken by one nation against another for some political purpose to prevent import or export of goods
Trade agreements
An enforceable treaty between two or more countries that addresses the
movement of goods and services,
eliminates trade barriers,
establishes terms of trade, and
encourages foreign investment
Trade organizations
Groups established to help with the free flow of goods and services between countries
Exchange rate
The price at which one currency can be purchased with another
Fixed exchange rate
An exchange rate for a currency that is fixed in relation to another currency such as the US dollar
Floating exchange rate
An exchange rate for a currency that is determined entirely in the international market by demand and supply
Managed exchange rate
A policy of allowing a currency’s exchange value to be set by the international market with intervention by the country’s central bank from time to time to smooth out fluctuations
GNI
A measurement of a country’s income divided by its population. It includes all the income earned by a country’s residents and businesses, including any income earned abroad.
Economic development
A rise in a country’s standard of living as measured by a rise in per capita GDP
Global inequality
Global inequality refers to the uneven distribution of wealth, resources, and opportunities among individuals and nations worldwide.
Barriers to economic development
Any factor that obstructs or impedes the progress and advancement of a country’s economy.
Economics of Catan (Trade)
At the heart of Catan is voluntary trade. Players exchange resources like wood, brick, and ore, mimicking real-world markets where countries or individuals trade to gain what they lack. Just like in international trade, players must decide whether a trade benefits them based on opportunity costs.
Economics of Catan (Barriers )
Sometimes players refuse to trade with others due to rivalry, past betrayals, or strategic reasons. This mimics trade barriers such as tariffs or embargoes in real economies, where political or economic motivations hinder open exchange.
Catan Trade Agreements
Temporary alliances or consistent trade partnerships in Catan mirror trade agreements like NAFTA or the EU. These agreements are based on mutual benefit and trust but can shift quickly depending on changing interests—just like in real international relations.
Economies of Catan
The game simulates an economy based on resource collection, production, and allocation. Each player’s settlement is like a mini-economy that grows depending on resource availability, infrastructure (roads, cities), and access to trade.
Economic Thinking
Players must think strategically, considering scarcity, opportunity cost, and marginal benefits. Every decision—whether to build, trade, or save—reflects economic reasoning and resource optimization.
Real life situations Catan
Catan illustrates real-world issues like resource monopolies, uneven resource distribution, infrastructure development, and the need for negotiation and diplomacy to achieve mutual gains.
