Unit 4: International economics

Imports

goods and services bought from other Nations

exports

goods/services that a nation produces and then sells to other nations

absolute advantage

country's ability to produce more of a given product (using fewer resources) than another country

comparative advantage

country's ability to produce a given product relatively more efficiently and at a lower opportunity cost.

quota

limit on the amount of a good that can be allowed into a country

tariffs

tax placed on an imported product

embargo

total ban on one or more products from a particular nations

standards

specific guidelines on goods coming into a country

subsidy

direct financial aid from the government to certain domestic industries

protectionism

protecting domestic producers with trade restrictions

free trade

international trade without government restrictions

balance of trade

rate at which a nation trades with other nations

trade surplus

when a nation exports more than it imports

trade deficit

when a nation imports more than in exports

exchange rate

price of one nation's currency in terms of another nation's currency

currency appreciation

value of currency becomes greater against other currencies

currency depreciation

value of currency becomes less in value against other currencies

purchasing power

how much you can buy with a given amount of money