OCR Economcis GCSE Topics 4.1-4.3

international trade

the exchange of goods and services between countries

imports

goods and services bought from abroad

exports

goods and services sold abroad

trading bloc

a group of countries joined together through a trade agreement

free trade agreement

a pact between 2 or more nations to reduce barriers to imports and exports among them

tarriffs

an additional fee that the government charges on imports. These raise the prices of imports discouraging people from purchasing them.

Quotas

where a certain amount of the goods or service is able to be imported each year

trade creation

where the removal of trade barriers causes a country to switch from purchasing goods from a high cost producer to a low cost producer

trade diversion

where the common external tariff causes a country to switch from a low cost producer to a higher cost producer

currency

the system of money used in a country or a group of countries

exchange rate

the rate at which one currency exchanges for another

appreciation

an increase in the value of a currency

depreciation

a decrease in the value of a currency

competitive devaluation

when countries devalue their currency in order to increase exports

balance of payments

record of all transactions between one country and the rest of the world

current account

records trade in goods and services, income flows and transfers between host and RoW

trade in goods

earnings from exports and spending on imports of goods

trade in services

earnings from exports and spending on imports of goods

primrary income

from investment and employment

secondary income

current transfers such as aid or remttances