Exam 1 Flashcards
(61 cards)
Globalization
Process in which people, ideas and goods spread throughout the world, spurring more interaction and integration between screens worlds governments and economies
Political Economy
study of production of trade and their links with custom government and law
International political economy
study of economics and international relations
Institutions
set of rules for economic purposes
Arbitrage
Purchase and sale of an asset to profit from a difference in the price
Transaction costs
expenses incurred when buying or selling a good or service
Specialization
method of production where I buns es focuses on production of certain product or services
David Ricardo
Principles of Politicsl Economy and Taxation
Returns to scale
changes in output as all factors change by the same proportion
Comparative Advantage
Ability of any actor to produce goods at lower opportunity costs than other economic actors
Supply / Demand
you know what this is
Static gains from trade
increase in utility or level of welfare where there is trade between two countries
Protectionism
theory shielding a country’s domestic industries from foreign competition by taxing imports
Tarrif
tax imposed on import d goods/services used to restrict trade
Factors
Land Labor Capital- Factor Endowment input used in production
Heckscher-Ohlin model
Theory countries export what can be most efficiently produced
Land vs Capital
Export goods high factor endowment
Import goods with lower FE
Stopper Samuelson
Rise in relative price of good will lead to rise in return to that factor which used used most intensively in production of good.
Price of capital intensive good go up owners of capital win, if go down labor wins
Long run attempts effects of relative changed of factor incomes
Ricardo-Vine Model
Immobile factors in export competing industry benefit from free trade: those in import competing lose
Rybcznksi model
Increasing one factor endowment increase output of industry that uses the factor intensively decrease output of the other industry
Mercantilism
economic nationalism purpose of building wealthy and powerful state, restraining imports, encouraging exports
Terms of trade
Value of export of a country relative to the value of its import
BEIC
Joint stock company
Jean Baptise colbert
French East India Company, Mercantilism, French secratary of state
Gold Standard
commitment by participating countries to fix the prices of their domestic currencies to gold
