Chapter 2 Our Global Economy

Belief that government should use trade barriers to restrict trade with foreign nations?

• Comparative Advantage

• Free Trade

• Protectionism

• Specialization

This occurs when a country produces less goods and services than what it consumers.

• Comparative Advantage

• Free Trade

• Protectionism

• Specialization

Producing a product at a lower opportunity cost (who sacrifices the least).

• Absolute Advantage

• Comparative Advantage

• Free Trade

• Specialization

Producing a product quicker and more efficient than another country.

• Absolute Advantage

• Comparative Advantage

• Free Trade

• Specialization

Unrestricted purchase of goods and services between countries.

• Absolute Advantage

• Comparative Advantage

• Free Trade

• Specialization

Goods and services sold to another country

• Export

• Free Trade

• Import

• Trade Barrier

Goods and services bought from another country

• Export

• Free Trade

• Import

• Trade Barrier

Trade agreement between Mexico, Canada, and the United States that eliminates trade barriers.

• European Union

• North American Free Trade Agreement

• World Trade Organization

Trade agreement between 27 European Nations. It creates a single economy.

• European Union

• North American Free Trade Agreement

• World Trade Organization

Coordinates free trade between member nations and works to resolve disputes between countries.

• European Union

• North American Free Trade Agreement

• World Trade Organization