economics 1143
Terms
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common market
-
free-trade association among nations
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balance of payments
- record of all transactions between a nation's residents and those of all foreign nations
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balance of trade
- difference between the value of a nation's imports and the value of its exports
- competitiveness
- ability to produce goods more inexpensively than other nations
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dumping
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selling a good below cost in a foreign country
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embargoes
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1. complete restrictions on imports or exports
2. usually established for political reasons
- euro
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note replacing national money in EMU nations
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European Union
- European free-trade association that removed all trade barriers among its member nations in 1992
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exchange rate
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price of one currency in terms of another
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export-led growth
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growth based on a trade surplus
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interest rates
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primary short-run determinant of exchange rates
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most-favored nation
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charged as low a tariff on exports as any other nation
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multinational corporation
- firm with global operations
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principle of comparative advantage
- states that as long as the relative opportunity costs of producing goods differ among nations, there are potential gains from trade, even if one nation has an absolute advantage in the production of everything
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quotas
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limits the quantity of imported goods
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regulatory trade restrictions
- procedural rules that limit imports
- tariffs
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1. taxes placed on traded goods
2 . forces producers to become more efficient
3. most common trade restrictions
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trade deficit
- impors greater than exports
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trade surplus
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exports greater than imports
- WTO
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1. World Trade Organization
2. international organization dedicated to eliminating trade barriers