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absolute advantage

the ability of one person of nation to produce a particular good at a lower cost than another person or nation


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


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


a good that is sent to another country for sale


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


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


the sale or transfer of government-owned businesses to individuals


the use of trade barriers to protect a nation's industries from foreign competition


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


a regional trade organization made up of European nations

trade deficit

the result of a nation importing more than it exports


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


a tax on imported goods

trade barrier

a means of preventing a foreign product or service from freely entering a nation's territory

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