Trade Theory and Globalization Lecture

A set of vocabulary flashcards based on key concepts discussed in a trade theory and globalization lecture.

Mercantilism

An economic theory from the 15th to the 18th century prioritizing national interests and wealth, focusing on enhancing exports and limiting imports.

Physiocracy

An economic theory from the 18th century asserting that land is the only source of wealth, emphasizing agricultural production.

Absolute Advantage

The ability of a country to produce a good more efficiently than another country, leading to increased overall wealth when traded.

Comparative Advantage

A principle stating that countries should specialize in producing goods where they have a lower opportunity cost, allowing mutual benefits from trade.

Globalization

The process of increasing interconnectedness and interdependence among countries, driven by trade, investment, and technology.

Free trade

The economic policy of allowing goods and services to be traded across international borders without governmental restrictions.

Trade barriers

Any regulation or policy that restricts international trade, including tariffs, quotas, and subsidies.

Foreign Direct Investment (FDI)

Investment made by a company or individual in one country in business interests in another country, in the form of establishing business operations or acquiring assets.

Multinational Corporation (MNC)

A corporate organization that manages production or delivers services in more than one country.

Protectionism

An economic policy of shielding a country's domestic industries from foreign competition by taxing imports.

International trade

The exchange of goods and services between countries, impacting economies worldwide.

Liberalization

The process of eliminating restrictions on trade and investment to create a more open and free market.