Module 2 Review - Imports, Exports, etc

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11 Terms

1
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Exports

goods produced domestically and sold abroad

2
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Imports

goods produced abroad and sold domestically

3
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World price

International price of a good/service

4
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What happens when world price is above EQ price?

Country will export

5
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What happens when world price is above EQ price to surplus?

Consumers are worse off, producers are better off

6
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What happens when world price is below EQ price?

Country will import

7
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What happens when world price is below EQ price to surplus?

Consumers are better off, producers are worse off

8
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What happens to total surplus when world price is either below or above EQ price?

Total surplus increases, their are gains from trade

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Tariffs

tax on imports

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Why are tariffs a benefit?

Increases domestic production and government revenue

11
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Why can international trade be hurtful?

Causes a decrease in domestic production and can lead to a reduction in domestic employment