Untitled Flashcards Set

Trade

The exchange of goods and services between two parties.

Import

Goods and services that a country buys from another country.

Export

Goods and services that a country sells to another country.

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 between countries for the purpose of leisure or business.

Absolute Advantage

The ability of a country to produce a larger volume of goods or services with fewer inputs compared to another country.

Comparative Advantage

The ability of a country to produce a good or service at a lower opportunity cost than other countries.

Free Trade

When a government does not interfere with exports by applying tariffs or subsidies.

Tariffs

A tax on imported goods or services.

Trade Liberalisation

The removal or reduction of restrictions on the free exchange of goods and services between nations.

Free Trade Agreement

An international treaty between two or more economies that reduces or eliminates certain barriers to trade in goods and services.

Bilateral FTA

Agreement between two nations to promote trade and commerce.

Multilateral FTA

Agreement among multiple countries that treats all parties equally to establish a free trade area.

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.

BTC

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.

Budget Deficit

A situation where expenditure exceeds revenue.

Budget Surplus

When income or revenue exceeds expenditure.