Economics Trade
Terms
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- balance of trade
- deficit/surplus
- free trade
- trade between countries without barriers or restrictions of any kind (no tariffs)
- protectionism
- put up barriers to trade, protect our industry
- absolute advantage
- when one country is better at making both goods
- comparative advantage
- when one country has an absolute advantage in everything, but would rather make one good than another, so trade occurs to save time
- infant industry arguement
- in favor of protectionism for young companies. give new companies government money so that they can compete in the market
- subsidies
- a government payment to support a business or market so they can compete
- tariffs
- taxes on imports designed to keep other countries out
- revenue tariff
- tax on imports designed to raise money for the government
- protective tariff
- tax on imports designed to keep other countries products out
- non-tariff barrier
-
health standards and safety requirements
-protect us, keep products out - quotas
- a limit on the number of products a country may sell in the US
- embargo
- ban on trade with a specific country
- boycott
- not buying a certain good
- foreign exchange
- trading with other countries
- strong dollar
- more imports, GNP down, move towards trade deficit
- weak dollar
- less imports, higher GNP, more towards trade deficit
- GATT
-
-General Agreement on Trade and Tariff
-nations that wanted to encourage foreign trade by reducing barriers
-became WTO - WTO
-
-world trade organization
-encourage globalization, countries can sure each other - NAFTA
-
North American Free Trade Association
-US, Canada, and Mexico - EU
-
-European Union
-free trade zone in Europe, economically more efficient - globalization
- the whole world is one market place, towards free trade, getting rid of barriers
- problems with free trade
- increase unemployment, lower enviornmental standards, lower wages, health risks, patents not protected, race to the bottom (sweatshops), cultural homogenization, union problems
- problems with protectionism
- political tension, decrease efficiency, decrease variety, higher prices