International trade Flashcards
(24 cards)
The ability of an individual, company or country to produce a good or service at a lower cost than any competitor; the ability to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources.
ABSOLUTE ADVANTAGE
Trade in tangible goods
VISIBLE TRADE (GB) OR MERCHANDISE TRADE (US)
Trade in services (banking, insurance, tourism and so on)
INVISIBLE TRADE
Direct exchanges of goods, without the use of money
BARTER OR COUNTER-TRADE
The difference between the money that a country receives for its visible exports (goods) and pays for its visible imports (goods)
BALANCE OF TRADE
The difference between a country’s total earnings from exports and its total expenditure on imports
BALANCE OF PAYMENTS
The situation in which a country is completely self-sufficient and has no foreign trade
AUTARKY
A positive balance of trade or payments
TRADE SURPLUS
A negative balance of trade or payments
TRADE DEFICIT
Selling goods in foreign markets at a lower price than in the home market, or even selling at cost price or at a loss in order to obtain foreign exchange
DUMPING
Imposing trade barriers in order to restrict imports and increase the sales of domestic products
PROTECTIONISM
Taxes charged on imports (to raise the price of foreign goods thus protecting the home production)
TARIFFS
Quantitative limits on the import of particular products or commodities
QUOTAS
A situation where there are no restrictions on imports and exports of goods
FREE TRADE
The belief that all nations will raise their living standards and real income if they specialize in the production of those goods and services in which they have the highest relative productivity
COMPARATIVE COST PRINCIPLE
A relative advantage that one country has over some, but not all, other countries because it is better at producing particular goods; the ability of an individual, company, or country to produce a good or service at a lower opportunity cost than its competitor
COMPARATIVE ADVANTAGE
The ending or relaxing of legal regulations or restrictions in a particular industry
DEREGULATION
The total annual value of a country’s goods and services
GDP (Gross domestic product)
The attempt to reduce imports by producing goods domestically
IMPORT SUBSTITUTION
The belief that the economy works best when the state does not interfere
LAISSEZ-FAIRE
An industry in its early stages of development in a particular country
INFANT INDUSTRY
An industry that a country considers very important for its economic development
STRATEGIC INDUSTRY
Money that is paid by a government or an organization to financially help producers with the cost of home-produced goods so that they can sell them at a lower price abroad
SUBSIDIES
An outright ban on imports
EMBARGO
