International Trade and Net Exports Concepts

These flashcards cover key vocabulary and concepts related to international trade, net exports, and their economic implications.

Net Exports

The difference between a country's exports and imports of goods and services.

Trade Deficit

A situation where a country's imports exceed its exports.

Trade Surplus

A situation where a country's exports exceed its imports.

Imports

Goods and services that are produced abroad and sold domestically.

Exports

Goods and services that are produced domestically and sold abroad.

Trade Balance

The comparison of the value of a nation's exports to the value of its imports.

Capital Assets

Financial assets such as stocks and bonds that are bought and sold in the world market.

Bureau of Economic Analysis

A source for data on the trade balance and economic activities in the United States.

Comparative Advantage

The ability of a country to produce a good at a lower opportunity cost than another country.

Purchasing Power Parity (PPP)

An economic theory that states a unit of currency should be able to purchase the same quantity of goods in different countries.

Real Exchange Rate

The nominal exchange rate adjusted for differences in price levels between countries.

Nominal Exchange Rate

The rate at which one currency can be exchanged for another.

Arbitrage

The practice of taking advantage of price differences in different markets to generate a profit.

Foreign Direct Investment (FDI)

Investment made by a company or individual in one country in business interests in another country.

Net Capital Outflow

The total amount of capital flowing out of a country minus the capital flowing in.

NAFTA

The North American Free Trade Agreement, which eliminates trade barriers between the U.S., Canada, and Mexico.

USMCA

The United States-Mexico-Canada Agreement, a trade deal that replaced NAFTA.

Exchange Rate

The value of one currency for the purpose of conversion to another.

Trade Negotiations

Discussions between countries to establish trade agreements or resolve trade disputes.

Tariff

A tax imposed on imported goods to protect domestic industries.

Inflation

An increase in prices and fall in the purchasing value of money.