2.0: unit two major concepts and review

import

a good or service purchased abroad

export

a good or service sold abroad

trade balance

the difference between a country’s imports and exports

trade surplus

imports < exports

trade deficit

imports > exports

GDP

gross domestic product

free trade areas

geographic regions which facilitate international trade

protectionism

the policy of imposing duties or quotas on imports in order to protect home industries from overseas competition

tariff

a tax on imports

quota

a restriction on the quantity of goods that can enter a country

embargo

a total ban on the import of a good from a particular country

absolute advantage

the ability of a producer to produce more of a good than another producer with the same quantity of inputs

comparative advantage

the idea that producers should produce the goods that they are most efficient at producing

mercantilism

economic policy under which nations sought to increase their wealth and power by obtaining large amounts of gold and silver and by selling more goods than they bought

isolationism

economic policy of non-participation in international economic and political relations

commerce

the buying and selling of goods and services

market economy

economic system under which economic decisions are made by individuals or the open market

command economy

economic system under which the government controls a country's economy

trade company

company that links buyers and sellers in different countries

stock

partial ownership of a company