Economics 2024 definitions

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.