18 terms

Southwest Asia Middle East Voluntary Trade/OPEC 18-19

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Voluntary trade
Occurs when different countries choose to engage in the exchange of goods with one another.
Why do countries trade goods?
Because no country has all the resources necessary to produce every single thing its people need.
Why is voluntary trade good for countries?
Because it lets a country sell its own resources and buy resources it needs.
Specialization
Is an efficient way to work, and the cost of items produced is lower. It increases trade because a country can get what it needs at the lowest cost when produced by someone who specializes in producing that item.
Oil production
Specialized by Saudi Arabia, Iran, Iraq, and Kuwait. These countries export millions of barrels every day.
Diamond industry (imports rough diamonds and exports cut and polished diamonds)
Specialized by Israel.
Exports coal and textiles
Turkey
Trade barriers
Natural or man-made obstacles to voluntary trade
Natural trade barriers
mountain ranges, deserts, rainforests, or lack of access to bodies of water.
Afghanistan
Landlocked country, so trade is difficult because it does not have ports to ship goods overseas.
Tariffs
Taxed placed on imported goods.
Quotas
Limits on the amount of a good that can be imported into a country.
Embargoes
Another political barrier to trade. Nations refuse to trade wit a country at all.
Currency
Something that is assigned value and can be used to purchase goods and services in a market.
Exchange rate
What the currency of a nation is worth in terms of another country's currency.
OPEC
Organization of Petroleum Exporting Countries
OPEC's purpose
To regulate the price of oil. It unifies petroleum prices in order to promote stability in the world oil market and to ensure a regular supply of petroleum to other countries.
Founding members of OPEC
Iran, Iraq, Saudi Arabia, Kuwait, and Venezuela
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