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when a country has the ability to produce a product relatively more efficiently, or at a lower opportunity cost
balance of payments
the difference between the money a country pays out to and receives from other nations
restrictive tariff, price increased nearly 70%, other nations retaliated (greatly restricted international trade)
Most favored nation clause
allows a third country to have the same tariff policy as the two original nations
North American Free Trade Agreement--1993 Lowered trade barriers between Canada, U.S., and Mexico
Fixed Exchange Rates
a rate of exchange that doesn't change--commonly used when we operated on the gold standard
the value of the dollar is less than that of other countries, foreign goods are more expensive; exporters are helped
the value of the dollar is more than that of other countries, foreign goods are less expensive; importers are helped
does business--sales and manufacturing in different countries around the world
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