Global Economics Study Guide—VOCAB

Define Specialization

Define Specialization

A situation that occurs when individuals or businesses produce a narrow range of products.

Define Economic Interdependence

A situation in which products in one nation depend on others to provide goods and services they do not produce.

Define Exports

Goods and services produced in a domestic market and sold in a foreign country.

Define Imports

Goods and services produced in a foreign country and then brought into and sold in a domestic market.

Define Trade

The voluntary exchange of goods or services between one nation and another.

Define Absolute Advantage

The ability of one trading nation to make a product more efficiently than another trading nation.

Define Comparative Advantage

A nation will specialize in what it can produce at a lower opportunity cost than any other nation.

Define Trade Barrier

Any law passed to limit free trade among nations.

Define Quota

Limits on the amount of product that can be imported.

Define Tariff

A fee charged for goods brought into a country from another country.

Define Revenue Tariff

Taxes on imports specifically to raise money.

Define Protective Tariff

Taxes on imported goods to protect domestic industry.

Define Voluntary Export Restraint

A limit on the number of goods that a country exports to avoid paying a tariff to another country.

Define Embargo

A law that cuts off most or all trade with a specific country.

Define Informal Trade Barrier

An indirect barrier to trade the results from another law.

Define Cartel

A group of producers that relates the production, pricing, and marketing of a product.

Define Developed Nations

Nations of the world with the highest standard of living.

Define Transitional Economies

Countries that have moved or are moving from a command economy to a market economy.

Define Less Developed Countries

Countries with lower GDP’s, less well developed industry, and a lower standard of living.

Define Infrastructure

The basic set of support systems needed to keep an economy going.

Define Per Capita Gross Domestic Product

A nations overall GDP divided by its population total.

Define Infant Mortality Rate

The number of children who die within the first year of life per 1,000 live births.

Define Life Expectancy

The average number of years a persona can expect to live.

Define Literacy Rate

The percentage of people older than 15 who can read and write.