Business Exam: 2

Globalization

• The process by which countries, economies, cultures, and populations become more interconnected and interdependent across the world through free trade.

International Trade

• The exchange of goods and services and resources between countries allows nations to get products they don’t produce efficiently themselves

Exports

Goods and services a country sells to other countries.

Imports

Goods and services a country buys from other countries.

Balance of Trade

• a way to measure the difference between a countrys exports and imports over a certain period

Trade Surplus

• when a country sells more to other countries than it buys from them

Trade Deficit

• when a country buys more goods and services from other countries than it sells to them

Absolute Advantage

• when a country can make a product using fewer resources than another country.

Comparative Advantage

• when a country can make a product at a lower opportunity cost than another country, so it benefits more from specializing in it.

Opportunity Cost

• what you give up when you choose one option over another.