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28 Cards in this Set
- Front
- Back
International Trade
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the purchase, sale, or exchange of goods and services across national borders
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Mercantilism
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trade theory that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports
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trade surplus
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condition that results when the value of a nation's exports is greater that the value of its imports
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trade deficit
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condition that results when the value of a country's imports is greater than the value of its exports
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absolute advantage
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ability of a nation to produce a good more efficiently than any other nation
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comparative advantage
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inability of a nation to produce a good more efficiently than other nations, but an ability to produce that good more efficiently than it does any other good
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factor proportions theory
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trade theory holding that countries produce and export goods that require resources that are abundant and import goods that require resources in short supply
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international product life cycle theory
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theory holding that a company will begin by exporting its product and later undertake foreign direct investment as the product moves through its life cycle
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new trade theory
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trade theory holding that
1) there are gains to be made from specialization and increasing economies of scale 2) the companies first to market can create barriers to entry 3) government may play a role in assisting its home companies |
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first-mover advantage
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economic and strategic advantage gained by being the first company to enter an industry
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national competitive advantage theory
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trade theory holding that a nation's competitiveness in an industry depends on the capacity of the industry to innovate and upgrade
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free trade
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pattern of imports and exports that occurs in the absence of trade barriers
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subsidy
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financial assistance to domestic producers in the form of cash payments, low-interest loans, tax, breaks, product price supports, or some other form
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foreign trade zone (FTZ)
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designated geographic region in which merchandise is allowed to pass through with lower customs duties and/or fewer customs procedures
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tariff
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government tax levied on a product as it enters or leaves a country
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ad valorem tariff
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tariff levied as a percentage of the state price of an imported product
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specific tariff
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tariff levied as a specific fee for each unit of an imported product
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compound tariff
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tariff levied on an imported product and calculated partly as a percentage of its stated price and partly as a specific fee for each unit
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quota
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restriction on the amount of a good that can enter or leave a country during a certain period of time
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voluntary export restraint (VER)
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unique version of export quota that a nation imposes on its exports, usually at the request of an importing nation
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tariff-quota
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lower tariff rate for a certain quantity of imports and a higher rate for quantities that exceed the quota
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embargo
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complete ban on trade in one or more products with a particular country
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administrative delays
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regulatory controls or bureaucratic rules designed to impair the flow of imports into a country
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currency controls
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restrictions on the convertibility of a currency into other currencies
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normal trade relations
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requirement that WTO members extend the same favorable terms of trade to all members that they extend to any single member
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dumping
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exporting a product at a price either lower than the price that the product normall commands in its domestic market or lower than the cost of production
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antidumping duty
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additional tariff placed on an imported product that a nation believes is being dumped on its market
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countervailing duty
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additional tariff placed on an imported product that a nation believes is receiving an unfair subsidy
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