International Economy Flashcards
(12 cards)
Absolute advantage
When an economy is able to produce greater quantity of output with the same quantity of input
Bilateral aid
Aid given from one country to another
Comparative advantage
When an economy is able to produce greater quantity of output at a lower opportunity cost
Economic development
Assessing the standard of living and economic welfare of those in a country
Foreign direct investment (FDI)
When firms in one country invest in another country’s capital
Globalisation
The process in which economies become increasingly interconnected and markets become worldwide in scope
HDI
Measures an economies development based on:
-life expectancy
-educational achievement
-living standards
Protectionism
When governments enact policies to restrict the free entry of imports into an economy
Quota
A limit on the amount of a good that can be imported into a country
Tariff
Form of tax placed on imported goods making them less price competitive
Trading bloc
government agreements that promote trade between certain countries
Free trade
Trade between countries without barriers
