ECONOMICS UNIT2 AOS2B - International trade

absolute cost advantage (who can make MORE or CHEAPER)

where a nation is the cheapest/most efficient producer of a particular good or service in the world

asia pacific economic corporation (apec)

is a regional forum that promotes freer trade among 21 member countries in the asia pacific area

australian fwc

determines minimum legal wages and conditions for australian workers to help avoid exploitation and ensure reasonable living standards 

the balance of trade/ trade balance (goods only)

financial account recording a countries total value of exports ( credits) minus the total values of imports (debits) measured over a period of time. can be a suprlus, deficit or exact balance. 

the balance on goods and services (BOGS) (goods and services)

represents the total value of goods and services exported minus the total value of goods and services imported, measured over a period of time.

bilateral free trade agreements (ftas)

negotiated between 2 or more countries and involve the removal of industry protection e.g. tariffs

comparative cost advantage (who sacrifices LESS)

where a country is can produce a particular good or service at a lower opportunity cost

development

the economic, social, polictical, institutional changes needed in low income countries to improve material or non-material elements affecting the quality of daily life

direction of trade

refers to the countries whom australia exchanges goods, services and money capital

exchange rate

represents the price of one nations currency when its swapped for another in the foreign exchange market. determined by the # of buyers relative to the # of sellers of a currency.

foreign exchange market

where buyers (D) and sellers (S) of foreign currencies negotiate the rate at which one nations currency is swaped for anothers. 

free trade

exists when theres no tariffs, subsidies, qoutas or other restrictions on the movement of goods, services and capital between countries.

international economics (why, patterns ,how,influence, gov)

looks at why countries trade, the patterns of trade, how we measure international trade, the factors that can influence trade levels, and how government policies can affect global trade.

international trade

involves a nation exporting and importing goods and services. transactions recorded on balance of trade. 

protectionism

involves the government using barriers to limit competition and inflow of goods from other countries.

subsidies

government cash payments or tax concessions made to local producers to make them more internationally competitive by covering some of their production costs.

tariffs 

an indirect tax on imported goods that raises their price to protect domestic producers and discourage foreign competition.

trade liberalisation

occurs when governments gradually reduce their protection of the local industry.

world trade organisation (WTO)

an international organisation committed to free trade and the orderly conduct of international transactions between countries

international competitiveness

involves local firms and producers being able to sell their comparable quality goods and services at prices that are relatively low and attractive against those charged by overseas rivals.