McConnell/Brue Economics Ch. 6
Terms : Hide Images
| 463134222 | trade flows (aka goods and services flows) | the US exports goods and services to other nations and imports goods and services from them | |
| 463134223 | resource flows (aka capital and labor flows) | US firms establish production facilities - new capital - in foreign countries and foreign firms establish production facilities in the US; labor also moves bw nations | |
| 463134224 | information and technology flows | US and foreign countries exchange information; same with technology | |
| 463134225 | financial flows | exchanging money bw nations | |
| 463134226 | multinational corporations | firms that have sizable production and distribution activities in other countries | |
| 463134227 | open economy | an economy that includes the international sector | |
| 463134228 | comparative advantage | a nation has a comparative advantage in some product when it can produce that product at a lower domestic opportunity cost than can a potential trading partner | |
| 463134229 | foreign exchange market | a market in which various national currencies are exchanged for one another | |
| 463134230 | exchange rate | equilibrium price of the foreign exchange market; rate at which the currency of one nation can be exchanged for the currency of another nation | |
| 463134231 | depreciation | dollar value of a foreign currency increases; international value of the dollar decreases | |
| 463134232 | appreciation | dollar value of a foreign currency decreases; international value of the dollar increases | |
| 463134233 | protective tariffs | excise taxes or duties placed on imported goods in order to shield domestic producers from foreign competition | |
| 463134234 | import quotas | limits on the quantities or total value of specific items that may be imported | |
| 463134235 | nontariff barriers to free trade | onerous licensing agreements, unreasonable standards of product quality, bureaucratic red tape in customs | |
| 463134236 | export subsidies | government payments to domestic producers of export goods | |
| 463134237 | trade war | trade disagreement between countries, they use protective tariffs as weapons | |
| 463134238 | Smoot-Hawley Tariff Act of 1930 | act intended to reduce imports and stimulate US production, actually prompted affected nations to issue equally high damaging retaliatory tariffs; contributing cause of the Great Depression | |
| 463134239 | Reciprocal Trade Agreements Act of 1934 | started the downward trend of tariffs; negotiating authority by the president, reductions generalized through most-favored-nation clauses | |
| 463134240 | most-favored-nation clauses | stipulate that any subsequently reduced UC tariffs resulting from nation-to-nation negotiation would apply equally to any nation that signed the original agreement | |
| 463134241 | General Agreement on Tariffs and Trade (GATT) 1947 | 23 nations; 1) equal trade treatment for all member nations 2) reduction of tariffs by multilateral negotiation 3) elimination of import quotas | |
| 463134242 | World Trade Organization (WTO) | GATT's successor | |
| 463134243 | European Union | a trade bloc (aka free-trade zone); abolished tariffs and import quotas on nearly all products traded among participating nations | |
| 463134244 | trade bloc | group of countries with common identity, economic interests and trade rules | |
| 463134245 | North American Free Trade Agreement (NAFTA) | free-trade zone with the same combined output as the EU but encompassing a much larger geographic area; Canada, Mexico, and the US | |
| 463134246 | globalization | the integration of industry, commerce, communication, travel, and culture among the world's nations | |
| 463134247 | Doha Round | def needed |
