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T4 Economics test
Trade
The exchange of goods and services between parties
Absolue Advantage
The ability of a country to produce a larger volume of goods or services with fewer inputs compared to another country.
Comparative Advantage
A country's ability to produce a good or service at a lower opportunity cost compared to other countries.
Circular Flow of Income Model
A model that illustrates the flow of money through the different sectors of the economy
Opportunity Cost
The value of the nest best alternative forgone
Global Economy
The economics of the world’s individual countries considered together as a single economic system
Import
goods and services that a country buys from another country
Export
Goods and services that a country sells to another country
Free Trade
a policy by which a government does not interfere with exports by applying tariffs or subsidies
Tariffs
A tax on imported goods or services
Investment
The allocation of resources with the expectation of future returns or benefits
Migration
The movement of people from one country to settle in another
Tourism
The movement of people for leisure or business purposes from one country to another
Specialisation
The process wherein a country decides to focus their labour on a specific type of goods or services
protectionism
the use of trade barriers and subsidies with the purpose of protecting domestic industries and jobs from foreign competition.
Business Trade Cycle
A model that represents the alternating periods of expansion and contracting in economic activity relative to the trend in the economic growth rate that the economy experiences over time.
Note 
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