Final exam Flashcards
(41 cards)
Trade barriers
any government limitation on the international exchange of goods
Heckscher-Ohlin Trade Theory
The theory that a country will export goods that make intensive use of the factors of production in which it is well endowed. Thus, a labor-rich country will export goods that make intensive use of labor.
Protectionism
The imposition of barriers to restrict imports. Commonly used protectionist devices include tariffs, quantitative restrictions (quotas), and other nontariff barriers.
Trade Barriers
Any government limitation on the international exchange of goods.
Trade Restrictions
- Tariffs
- Quotas
- Nontariff barrier
- Subsidies
- Prohibitions
Tariff
A tax imposed on imports;
Nontariff Barriers to Trade
Obstacles to imports other than tariffs; Examples include restrictions on the number of products that can be imported (quota); regulations that favor domestic over imported products; and other measures that discriminate against foreign goods or services.
Stolper-Samuelson Theorem
The theory that protection benefits the scarce factor of production
Microeconomics
the study of economic behavior in particular markets
Macroeconomics
study of the economic behavior of entire economies by total production and employment
Factors of Production
- Land
- Labor
- Capital
- Human capital
Depression
A severe and prolonged reduction in economic activity, as occurred during the 1930s.
Recession
A period of decline in economic activity lasting more than a few months, as reflected by falling output, employment, income, and other aggregates measures.
Comparative Advantage
The Ability of a country or firm to produce a particular good or service more efficiently than other goods or services
Absolute Advantage
The ability of a country or firm to produce more of a particular good or service than either countries or firms using the same amount of effort and resources
Socialism
a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.
Communism
a political theory derived from Karl Marx, advocating class war and leading to a society in which all property is publicly owned and each person works and is paid according to their abilities and needs.
Protectionism
The imposition of barriers to restrict imports
Trade restrictions
- Tariffs
- Quotas
- Nontariff barrier
- Subsidies
- Prohibitions
Nontariff Barriers to Trade
Obstacles to imports other than tariffs (trade taxes).
Who wins with protectionist policies? Who loses?
- Domestic Producers (winners)
* Consumers, exporters, foreign producers (losers)
Stolper-Samuelson Theorem
The theory that protection benefits the scarce factor of production; if a country imports goods that make intensive use of its scarce factor, then limiting imports will help that factor.
World Trade Organization
An institution created in 1995 to succeed the GATT and to govern international trade relations. The WTO encourages and polices the multilateral reduction of barriers to trade, and it oversees the resolution of trade disputes.
Foreign Direct Investment
an investment in the form of a controlling ownership in a business in one country by an entity based in another country.
