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ECONOMICS UNIT 7

STUDY
PLAY
absolute advantage
the ability of one person of nation to produce a particular good at a lower cost than another person or nation
appreciation
increase in the value of a currency
balance of trade
the relationship between a nation's imports and exports
comparative advantage
the ability of one person or nation to produce a good at opportunity costs that are lower than those of another person or nation
developed nation
country with a higher average level of material well-being
development
the process by which a nation improves the economic, political, and social well-being of its people
exchange rate
value of a foreign nation's currency in terms of the home nation's currency
export
a good that is sent to another country for sale
import
a good that is brought in from another country for sale
import quota
limit on the amount of a good that can be imported
infant industry
a new industry
infrastructure
the services and facilities necessary for an economy to function
international monetary fund (IMF)
organization formed to stabilize international exchange rates and facilitate development
less-developed country
nation with a low level of material well-being
privatization
the sale or transfer of government-owned businesses to individuals
protectionism
the use of trade barriers to protect a nation's industries from foreign competition
NAFTA
agreement that eliminates all tariffs and other trade barriers between Canada, Mexico, and the United States
trade surplus
the result of a nation exporting more than it imports
EU
a regional trade organization made up of European nations
trade deficit
the result of a nation importing more than it exports
VER
a self imposed limitation on the number of products shipped to a particular country
trade war
a cycle of increasing trade restrictions
world bank
the largest provider of development assistance
tariff
a tax on imported goods
trade barrier
a means of preventing a foreign product or service from freely entering a nation's territory