Global Trade - Vocabulary

goods and services PURCHASED from other countries

• Imports

• Exports

• Absolute Advantage

• Comparative Advantage

goods and services SOLD to other countries

• Imports

• Exports

• Absolute Advantage

• Comparative Advantage

occurs when a country possesses unique resources or capabilities allowing for the lowest cost of production for a product

• Absolute Advantage

• Exports

• Imports

• Comparative Advantage

occurs when a country is able to produce a product more efficiently and at a lower cost than another country

• Comparative Advantage

• Absolute Advantage

• Exports

• imports

French word for ‘leave alone’; economic concept opposing governmental involvement in commerce beyond what is necessary to keep an economic system running on its laws; associated with a free enterprise system

• Laissez-faire

• Comparative Advantage

• Absolute Advantage

• Exports

tax on imports

• Tariff

• Protective Tariff

• Revenue-producing Tariff

• Quota

tariff which increases price on imports to protect domestic products

• Protective Tariff

• Tariff

• Revenue-producing Tariff

• Quota

tariff which supplies revenue for a country

• Revenue-producing Tariff

• Protective Tariff

• tax on imports

• Quota

limits the quantity or monetary value of an import; controls the level of an import

• Quota

• Embargo

• Revenue-producing Tariff

• Protective Tariff

complete ban on certain products coming in or leaving the country; usually put in place for political reasons

• Embargo

• Quota

• Revenue-producing Tariff

• Protective Tariff