Economics

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Imports

The goods and services that a country buys from another country

Exports

The goods and services that a country sells to other countries

International trade

A country exporting and importing goods and services

Net foreign debt

The difference between total debt a country owes to its foreigners and the total debt foreigners owe to that country

Net foreign equity

The difference of what foreigners own in that country in the form of equity and what a country own overseas in the form of equity.

International competitiveness

the ability of a country's businesses to profitably produce and export goods and services to global markets while maintaining or improving the living standards of its residents

Trade balance

A country’s total value of exports minus the total value of imports

Leakages

money that is leaving the economy

injections

money coming into the economy

Interest rates

The cost of borrowing money and the return offered to those lending money

productivity

The total outputs of production divided by the total inputs used

Economic growth

An increase in real GDP over time

Economic activity

The level of employment, income, production, and expenditure in an economy

Comparitive advantage

Occurs when a nation specializes in the production of those goods and services where it is relatively more efficient and cheaper than others

Absolute advantage

Occurs when a nation is the cheapest or most efficient producer of a particular good and or service in the world

Exchange rate

The comparison of a country's currency to a foreign currency or a weighted basket of foreign currencies such as the trade weighted index (TWI)

specialisation

When a country focuses on producing what they are most efficient at

Economies of scale

Producing in large volumes to reduce the cost per unit of production due to fixed costs spreading over multiple factors of production.

Trade liberalisation

The act of removing barriers to trade such as tariffs, quotas, and subsidies to result in the end goal of free trade

Tariffs

Taxes on imported goods. It makes local producers more competitive through making imports relatively more expensive than domestic goods.

Subsidies

The government providing local producers with financial or other forms of assistance to make them follow certain behaviours. This lowers the cost of production these local producer which puts downwards pressure on their product prices

quotas

A protectionist policy that limits the amount of imports in a country. It prevents the 'dumping' of goods and services and creates more job opportunities due to the needed increase in production

Protectionism

The limiting of free trade through increasing trade barriers such as quotas, tariffs, and subsidies

Floating exchange rate

When the exchange rate is determined by the market forces, supply and demand

appreciation

When a currency can purchase a greater amount of foreign currency

depreciation

When a currency can purchase a lesser amount of a foreign currency

Capital inflow

Money flowing into an economy

Capital outflow

money flowing out of the economy

Terms of trade

Terms of Trade (TOT) is the ratio of a country's export prices to its import prices, showing how many imports a country can obtain for a given amount of exports.

Current account

The receipts and payments of a ‘current’ nature where they do not require any future obligation. The components are: balance of merchandise trade (BOMT), Net services, Net primary income, and Net secondary income

Net primary income

The difference of the flow of income resulting from foreigners owning a country’s assets and the income received from the foreign assets owned by the country

Net secondary income

When one country provides money to another country. It is one-way movements of money where nothing is expected in return. e.g foreign aid

‘Dumping’ of goods

The selling of a good in a foreign market at the price below the costs of production. It is done to eliminate competition, to offload excess supply, and if a product is heavily subsidised in the country of origin.