Global Economy and International Trade

A set of flashcards covering key concepts related to the global economy and international trade.

What are the benefits of increased economic integration?

Efficiency, welfare gains, and improvements in economic well-being.

What are the potential downsides of economic integration?

Benefits may not result in equity.

What is the relationship between world demand and the price of a good?

The price is determined by world demand and supply.

What is autarky?

Self-sufficiency, where a country produces and consumes all goods without international trade.

What determines if Tradenia should export or import bindles?

It depends on whether the domestic price of bindles is higher or lower than the world price.

When should a country export a good?

When the domestic price is lower than the world price.

When should a country import a good?

When the domestic price is higher than the world price.

What are the benefits of international trade?

Reduction of domestic monopolies, lower prices, increased consumer choice, and economic growth.

What is the impact of international trade on resource allocation?

More efficient allocation of resources.

What is free trade?

Absence of government intervention in international trade.