Economics - International Trade

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29 Terms

1

international trade

International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services.

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2

trade off

A trade-off is a situational decision that involves diminishing or losing one quality, quantity, or property of a set or design in return for gains in other aspects.

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3

opportunity costs

the potential forgone profit from a missed opportunity—the result of choosing one alternative and forgoing another.

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4

specialisation

the process wherein a company or individual decides to focus their labor on a specific type of production/job.

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5

absolute advantage

the ability of a party to produce a good or service more efficiently than its competitors.

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6

comparative advantage

to produce a particular good or service at a lower opportunity cost than its trading partners.

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7

capitalism

an economic and political system in which a country's trade and industry are controlled by private owners for profit.

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8

trade barrier

any regulation or policy that restricts international trade, especially tariffs, quotas, licences etc.

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9

tariff

a tax on goods and services imported into a country.

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10

quota

the time-bound restrictions governments impose on trade. This is generally done to protect and encourage domestic business and balance trade.

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11

embargo

a trade restriction, typically adopted by a government, a group of countries or an international organization as an economic sanction.

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12

OECD

Organisation for Economic Co-operation and Development

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13

EU

European Union

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14

APEC

Asia-Pacific Economic Cooperation

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15

WTO

World Trade Organization

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16

ASEAN

Association of South East Asian Nations

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17

IMF

International Monetary Fund

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18

“duty-free”

the act of being able to purchase an item in particular circumstances without paying import, sales, value-added, or other taxes.

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19

laissez-faire

a type of economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies or transfer payments).

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20

tariff purposes

  • to serve as a source of revenue

  • to protect domestic industries

  • to remedy trade distortions (punitive function)

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21

trade deficit

occurs when a country imports more than it exports. In other words, when a country buys more than it sells, it has a trade deficit.

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22

hidden trade barriers

Government regulations that do not directly restrict trade, but indirectly impede free trade by imposing excessive or obscure requirements on goods sold within a country, especially imported goods.

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23

characteristics of international trade

Characteristics of foreign trade | Import and export services Essential characteristics of foreign trade Exchange of different goods and services. Necessary regulations and measures. Currency flow reflected in the exchange rate. Encourage the production of a country.

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24

differences from domestic trade

Domestic business involves those economic transactions that take place within the geographical boundaries of a country. International business involves those economic transactions that take place outside the geographical boundaries of a country

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25

most traded export products

  1. Cars

  2. refined petroleum

  3. integrated circuits

  4. vehicle parts

  5. computers

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26

illicit trade

the production or distribution of a good or service that is considered illegal by a legislature. It includes trade that is strictly illegal in different jurisdictions, as well as trade that is illegal in some jurisdictions but legal in others.

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27

mercantilism

was a form of economic nationalism that sought to increase the prosperity and power of a nation through restrictive trade practices. Its goal was to increase the supply of a state's gold and silver with exports rather than to deplete it through imports. It also sought to support domestic employment.

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28

suez canal

a man-made waterway connecting the Mediterranean Sea to the Indian Ocean via the Red Sea. It enables a more direct route for shipping between Europe and Asia, effectively allowing for passage from the North Atlantic to the Indian Ocean without having to circumnavigate the African continent.

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29

panama canal

President Theodore Roosevelt oversaw the realization of a long-term United States goal—a trans-isthmian canal. Throughout the 1800s, American and British leaders and businessmen wanted to ship goods quickly and cheaply between the Atlantic and Pacific coasts.

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