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Mercantilism
Theory of trade stating each country strives to export more than it imports for more wealth
Protectionism
Trade rules that restrict imports in order to protect domestic industries
Absolute advantage
A country’s ability to produce a good/service better than any other country; can do the job but doesn’t have to
Comparative advantage
A country’s ability to produce one product more efficiently than other products in its economy
Complementary
Measure of how well a country’s export profile matches another country’s
Transnational Corporation (TNC)
Firm with the power to control operations in more than one country, even if it doesn’t own it
Competitive advantage
Firm’s ability to outperform other TNC’s in its industry
Neoliberalism
Range of pro-market and anti-government positions in the economy - reduces gov. control/regulation, promotes privatization
International Monetary Fund (IMF)
An organization that aims to promote global economic stability and growth by providing financial assistance and advice to member countries.
World Bank
International financial organization providing funding & expertise to promote economic growth in developing countries
World Trade Organization (WTO)
International trade organization regulating trade amongst 184 member states, negotiating trade agreements and resolving trade disputes
Free Trade Agreement
Treaty between two or more countries reducing tariffs and promoting foreign investment
Tariff
Tax on imported goods/services
Customs union
Free trade agreement between two or more member countries with a single/common external policy for nonmembers
Mercosur
Spanish acronym for the South Ameican Customs - a South American customs union like Brazil, Argentina, Uruguay
OPEC
International trade agreement designed to regulate output of oil
Trade embargo
Ban on trade with a specific country on a specific good
Financial market
Marketplace where financial instruments are traded; stock markets, bond markets
Debt crisis
When a government’s debts exceed its tax revenues to the point it cannot meets its loan payments
Import substitution industrialization
Economic development policy replacing imported goods with domestic goods to reduce dependence and spur industrialization
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