AP Macroeconomics Ch 37 & 38

344154124	labor-intensive goods	a product requiring a relatively large amount of labor to be produced
344154125	land-intensive goods	a product requiring a relatively large amount of land to be produced
344154126	capital-intensive goods	a product that requires a relatively large amount of capital to be produced
344154127	cost ratio	an equality showing the number of units of two products that can be produced with the same resources
344154128	principle of comparative advantage	says that total output will be greatest when each good is produced by the nation that has the lowest domestic opportunity cost for that good
344154129	terms of trade	the rate at which units of one product can be exchanged for units of another product
344154130	trading possibilities line	a line that shows the different combinations of two products that an economy is able to obtain (consume) when it specializes in the production of one product and trades (exports) it to obtain the other product
344154131	gains from trade	the extra output that trading partners obtain through specialization of production and exchange of goods and services.
344154132	world price	the international market price of a good or service, determined by world demand and supply
344154133	domestic price	the price of a good or service within a country, determined by domestic demand and supply
344154134	export supply curve	an upward-sloping curve that shows the amount of a product that domestic firms will export at each world price that is above the domestic price
344154135	import demand curve	a downsloping curve showing the amount of a product that an economy will import at each world price below the domestic price
344154136	equilibrium world price	the price in a competitive market at which the quantity demanded and the quantity supplied are equal, there is neither a shortage nor a surplus, and there is no tendency for price to rise or fall
344154137	tariffs	a tax imposed by a nation on an imported good
344154138	revenue tariff	a tariff designed to produce income for the Federal government
344154139	protective tariff	a tariff designed to shield domestic producers of a good or service from the competition of foreign producers
344154140	import quota	a limit imposed by a nation on the quantity (or total value) of a good that may be imported during some period of time
344154141	nontariff barrier (NTB)	all barriers other than protective tariffs that nations erect to impede international trade
344154142	voluntary export restriction (VER)	voluntary limitations by countries or firms of their exports to a particular foreign nation to avoid enactment of formal trade barriers by that nation
344154143	strategic trade policy	the use of trade barriers to reduce the risk inherent in product development by domestic firms, particularly that involving advanced technology
344154144	dumping	the sale of products below cost in a foreign country or below the prices charged at home
344154145	World Trade Organization	an organization of 145 nations that oversees the provisions of the current world trade agreement, resolves trade disputes stemming from it, and holds forums for further rounds of trade negotiations
344154146	balance of payments	a summary of all the transactions that took place between the individuals, firms, and government units of one nation and those of all other nations during a year.
344154147	current account	the section in a nation's international balance of payments that records its exports and imports of goods and services, its net investment income, and its net transfers
344154148	balance on goods and services	the exports of goods and services of a nation less its imports of goods and services in a year
344154149	trade deficit	the amount by which a nation's imports of good exceed its exports of goods
344154150	trade surplus	the amount by which a nation's exports of goods exceed its imports of goods
344154151	balance on current account	the exports of goods and services of a nation less its imports of goods and services plus its net investment income and net transfers in a year
344154152	capital account	the section of a nation's international balance-of-payments statement that records the foreign purchases of assets in the United States (creating monetary inflows) and U.S. purchases of assets abroad (creating monetary outflows)
344154153	balance on capital account	the foreign purchases of assets in the United States less American purchases of assets abroad in a year
344154154	official reserves	foreign currencies owned by the central bank of a nation
344154155	balance-of-payments deficits	the amount by which the sum of the balance on current account and the balance on capital account is negative in a year
344154156	balance-of-payments surpluses	the amount by which the sum of the balance on current account and the balance on capital account is positive in a year
344154157	flexible- or floating-exchange-rate system	a rate of exchange determined by the international demand for and supply of a nation's money; a rate free to rise or fall
344154158	fixed-exchange-rate system	a rate of exchange that is set in some way and therefore prevented from rising and falling with changes in currency supply and demand
344795558	Purshasing-power-parity theory	The idea that exchange rates between nations equate the purchasing power of various currencies. Exchange rates between any two nations adjust to reflect the price-level differences between the countries.
344795559	Currency interventions	A government's buying and selling of its own currency or foreign currencies to alter international exchange rates
344795560	Exchange controls	The control a government may exercise over the quantity of foreign currency demanded by its citizens and firms and over the rates of exchange in order to limit its outpayments to its inpayments (to eliminate a payments deficit)
344795561	Gold standard	a historical system of fixed exchange rates in which nations defined their currencies in terms of gold, maintained a fixed relationship between their stocks of gold and their money supplies, and allowed gold to be freely exported and imported
344795562	Devaluation	a decrease in the governmentally defined value of a currency
344795563	bretton woods system	the international monetary system developed after the Second World War in which adjustable pegs were employed, the International Monetary Fund helped stabilze foreign exchange rates, and gold and the dollar were used as international monetary reserves
344795564	International monetary fund (IMF)	the international association of nations that was formed after the Seond World War to make loans of foreign monies to nations with temporary payment deficits and, until the 1970s, to administer the adjustable pegs. It now mainly makes loans to nations facing possible defaults on private and government loans
344795565	Managed floating exchange rates	an exchange rate that is allowed to change (float) as a result of changes in currency supply and demand but at times is altered (managed) by governments via their buying and selling of particular currencies.