EPF Unit 13 VOCAB

absolute advantage- when a country can produce a good at a lower cost using the same amount or a reduced amount of resources

balance of trade- the relationship between the value of a country’s exports and the value of its imports

budget deficit- occurs when more money is spent than received 

budget surplus- occurs when more money is received than spent

comparative advantage- when a country can produce a good at a lower opportunity cost than another country 

Embargoes- a law that cuts off most or all trade with a specific country

excise tax- a tax included in the price of specific goods and services, for example, gasoline

Exports- goods or services sold to another country 

fiscal policy- a method of taxing and spending used by the government to influence the economy

Imports- goods or services purchased from another country 

Inflation- a general increase in the price of goods and services and a general decrease in the value or purchasing power of a currency 

informal trade barriers- indirect trade restrictions, for example, licenses for health and safety measures 

international trade- the process of importing and exporting

monetary policy- the process by which the monetary authority of a country controls the money supply to influence the economy

national debt- the total amount of money owed by the federal government; calculated by subtracting the total federal deficits from the total surpluses

Quotas- a legal limit a country places on how many goods of a specific type it can import from another country

Tariff- a fee charged for goods imported from another country 

trade agreement- an agreement by a group of countries to promote trade among them

trade deficit- when a nation imports more goods and services than it exports

trade surplus- when a nation exports more goods and services than it imports 

voluntary export restraints- when an exporter can voluntarily choose to take an action that allows them to avoid a trade barrier