ESP3 - Unit 1

International trade

The purchase, sales, and exchange of goods or services across national borders is called …

Trade surplus

… is the condition that results when the value of national’s exports is greater than the value of imports

Mercantilism

The trade theory that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports is called …

Trade deficit

A condition that results when the value of national’s imports is greater than the value of exports is called

zero - sum game

When a nation can only increase its share of wealth at the expense of its neighbor, it is called a …

Absolute advantage

… is the ability of a nation to produce a good more efficiently than any other nation.

Factor proportion theory

… states that countries produce and export goods that require resources that are abundant and imports goods that require resources in short supply.

Comperative advantage

… argues that trade is still beneficial even if one country is less efficient in the production of two goods, so long as it is less inefficient in production of one of its goods.

New Trade Theory

The … states that 1) there are gains to be had from specilization and increasing economies of scale, 2) those companies first to enter a market can create barriers to entry, and 3) government may have a role to play in assisting its home-based companies.

first-mover advantage

The economic and strategy advantage gained by being the first company to enter the industry is called…

National competitive advantage

The … theory states that a nation’s competitiveness in an industry depends on the capacity of the industry to innovate and upgrade.

free trade

The pattern of imports and exports that would result in the absence of trade barriers is called …

First - mover

… advantages result because economies of scale limit the number of companies that an industry can sustain

subsidy

Financial assistance to domestic producers in the form of cash payments, low-interest loans, tax breaks, product price supports, or some other forms is called …

Loan guarantee

When a government guarantees that it will repay the loan of a company if the company should default on repayment, it is called …

Foreign trade zone

A designated geographic region in which mechandise is allowed to pass through with lower customs duties/ or fewer customs procedures is called a …

tariff

A … is a government tax levied on a product as it enters or leaves a country.

export tariff

A tariff levied by the government of a country that is exporting a product is called an …

import tariff

A tariff levied by the government of a country that is importing a product is called an …

transit

A … tariff is a tariff levied by the government of a country that a product is passing through on its final destination.

ad valorem

A tariff levied as a percentage of the stated price of an imported product is called … tariff.

Specific tariff

A tariff levied as a specific fee for each unit (measured by number, weight, etc) of an imported product is called …

compound tariff

A tariff levied as a an imported product and calculated partly as a percentage of its stated price, and partly as a specific fee for each unit is referred to as a …

quota

Restriction on the amount of a good that can enter or leave a country during a certain period of time is called a …

VER (voluntary export restraints)

Countries normally self-impose a … in response to the threat of an import tariff or total ban on a product by an importing nation.

tariff - quota

A lower tariff rate for a certain quantity of imports and higher rate for quantities that exceed the quota is referred to as a …

embargo

A complete ban on trade (exports and imports) in one or more products with a particular country is called an …

local content requirements

Laws stipulating that a specified amount of a good or service is supplied by producers in the domestic market are called …

administrative delays

Regulatory controls or bureaucratic rules designed to impair the rapid flow of imports into a country are …

Currency control

… can reduce imports by stipulating an exchange rate that is unfavorable to potential importers

WTO

The … is the only international body dealing with rules and trades between nations.

normal trade relations

A key component of the WTO that was carried over from the GATT is the principle of non-discriminaation called …

dumping

When a company exports a product at a price lower than the price normally charged in its domestic market, it is said to be …

countervailing duty

… is an additional tariff placed on an imported product that a nation believes is receiving an unfair subsidy.

absolute advantage

If a country can produce something more cheaply than anywhere else in the world, it has a(an) …

trade surplus

A country exporting more than imports has a …

autarky

… is the (impossible) situation in which a country is completely self-sufficient and has no foreign trade.

balance of trade

Countries that exports a lot of oil and manufactured goods tend to have a positive …

WTO

The … has established rules for trade between nations.

balance of payment

… is a difference between what a country pays for all its imports and receives for all its exports.

free trade

Many economists encourage governments to abolish import taxes and have complete …

importing and exporting; imports - exports

… are the two aspects of foreign trade: a country spends money on goods it … and gains money through its …

tariffs

Unlike quotas, … produce revenue for he government.