International Trade and Money summary [211581]2023International Trade and Money summary [211581]2023

Comparative Advantage - -the ability to produce a good at a lower opportunity cost than another producer -Terms of Trade - -The amount of an exported good that must given up to obtain an imported good - measured by the ratio of a country's export prices to its import prices. -Protective Tarif...

Exports - -the sale of goods and service created by domestic producers and sold to foreigners -Imports - -the purchase of goods and service created by foreigners -Net exports - -exports - imports -Trade deficit - -exporting less than you are importing -Trade surplus - -exporting more tha...

Specialization - -when countries produce the things they do best in exchange for the things that other people do best -Exports - -Goods and services that a country produces and sells to other nations -Imports - -Good and services that a country buys from another country -Absolute Advantage ...

The Benefits of Trade - -1. increases in domestic production and consumption as a result of specialization 2. economies of scale in production 3. greater choice for consumers 4. increased competition and greater efficiency in production 5. lower prices for consumers 6. acquiring neede...

Free Trade - -The absence of barriers to the free flow of goods and services btw countries. -Benefits of trade - -Common sense suggests that some international trade is beneficial. Theories of Smith, Ricardo and Heckscher-Ohlin show why it is beneficial for a country to engage in international tr...

Free Trade - -The absence of barriers to the free flow of goods and services btw countries. -Benefits of trade - -Common sense suggests that some international trade is beneficial. Theories of Smith, Ricardo and Heckscher-Ohlin show why it is beneficial for a country to engage in international tr...

Free Trade - -The absence of barriers to the free flow of goods and services btw countries. -Benefits of trade - -Common sense suggests that some international trade is beneficial. Theories of Smith, Ricardo and Heckscher-Ohlin show why it is beneficial for a country to engage in international tr...

• International trade - --involves the exchange of goods or services between two countries. -• Factor endowment - --the factors of production that a country has available to produce goods and services. -• Specialisation - --- where a country specialises in the production of goods and ser...

International monetary system (11) - -Institutional arrangements that countries adopt to govern exchange rates -Floating exchange rate (11) - -Country allows the foreign exchange market to determine the relative value of a currency (USD, euro, yen, and pound float freely against each other) -P...

Because France specializes in the production of wine, and United Kingdom specializes in the production of beef, trade between the two countries is beneficial. This law of economics was first identified by David Ricardo as - -comparative advantage -This chart shows how many hours the production of...

What is Absolute and Comparative Advantage? Define a Trade-off - -Absolute Advantage- refers to a country's ability to produce a certain good more efficiently than another country. The real world is far more complicated than this. David Ricardo, an early 19th century British economist argues that t...

Balance of Payment - -Record of a country's economic transactions with the rest of the world -Balance of Trade - -Difference between the value of visible exports and the value of visible imports -Surplus - -Balance is positive -Deficit - -Balance is negative -Balanced balance of trade -...