QCAA Economics Unit 3 Terms (copy)

Imports

A good or service bought in one country that was produced in another.

Exports

A good or service produced in one country that is purchased by another country.

Multinational Corporation (MNC)

A corporation with business operations in at least two countries, often with headquarters in one country and subsidiaries in another.

Subsidiary

A company controlled by a holding company.

Internal Stability

A term summarizing sustainable economic growth, full employment, and price stability.

External Stability

Government policy measures ensuring a country meets its financial obligations with the rest of the world, measured by foreign debt, trade level, and exchange rate.

Factor Endowment

An abundant supply of resources like land, labor, capital, and enterprise in a country.

Transfer-pricing

The price set for intra-company trade by multinational corporations.

Composition of Trade

Refers to what a country trades.

Direction of Trade

Refers to where and with whom a country trades.

Trade Deficit

A situation where a country imports more than it exports, potentially leading to economic expansion.

Trade Surplus

A situation where a country exports more than it imports, potentially leading to economic contraction.

Absolute Advantage

The ability to produce more units of a good or service than another producer using the same quantity of resources.

Comparative Advantage

A country has a comparative advantage if it has a lower opportunity cost in the production of a good compared to another country.

Opportunity Cost

The value of the next best alternative forgone when a decision is made.

Competitive Advantage (of a nation)

Trade advantage obtained through a nation's industries' capacity to innovate and upgrade.

Firm Strategy, Structure and Rivalry

Conditions governing company creation, management, and domestic rivalry that promote innovation.

Factor Conditions

Improvements in factors like infrastructure and specialized training of the workforce to enhance competitiveness.

Demand Conditions

The benefits of having a clear view of consumer demand to anticipate international market needs.

Related and Supporting Industries

The advantage gained from having efficient and internationally competitive supplier industries.

Self Sufficiency

The ability of a nation to produce sufficient products to meet its own needs from domestic sources.

Globalisation

The process by which countries, businesses, and people become more connected, facilitated by improvements in transport and communications.