Economics Unit 2: The Global Economy

Export

A good or service sent to another country for sale

Import

A good or service brought in from another country for sale

Interdependence

the shared need of countries for the resources, goods, services, labor, and knowledge supplied by other countries

Protectionism

The use of trade barriers to shield domestic industries from foreign competition

World Trade Organization (WTO)

international organization founded to make global trade more free. works to ensure that countries comply with GATT, to negotiate new trade agreements, and to resolve trade disputes

Trade barrier

a means of preventing a foreign product or service from freely entering a nation's territory

Appreciation

An increase in the value of a currency

Trade Surplus

a situation in which a nation exports more goods and services than it imports (positive trade balance)

Trade deficit

a situation in which a nation imports more goods and services than it exports (negative trade balance)

Per Capita GDP

a nation's gross domestic product (GDP) divided by its population

Privatization

the process of selling businesses or services operated by the government to individual investors, and then allowing them to compete in the marketplace

Offshoring

The movement of some of a company's operations or resources of production, to another country

Sustainable Development

the goal of meeting current development needs without using up resources needed by future generations

Absolute Advantage

The ability to produce more of a given product using a given amount of resources

Comparative Advantage

the ability to produce a product most efficiently given all the other products that could be produced