Global Trade

Trade

• buying and selling goods and services from other countries

• when a business transfers work overseas, usually from a developed country to developing countries

• when one country produces a good at a lower opportunity cost than another

• a country with a high GDP, high standard of living, and high wages

Globalization

• the dollar value of the final goods and services products produced in a country’s borders in a given year

• the process of the world’s economies becoming more interconnected

• the comparison of a country’s imports vs exports

• when countries only produce what they are best at

Exports

• a country with a high GDP, high standard of living, and high wages

• goods and services purchased from other countries

• used to make a final product

• goods and services produced in one country and sold to other countries

Imports

• goods and services purchased from other countries

• when one country produces a good at a lower opportunity cost than another

• goods and services produced in one country and sold to other countries

• when countries only produce what they are best at

Trade Balance

• the dollar value of the final goods and services products produced in a country’s borders in a given year

• the comparison of a country’s imports vs exports

• when a business transfers work overseas, usually from a developed country to developing countries

• a country with a low GDP, low standard of living, and low wages

Trade Surplus

• when a business transfers work overseas, usually from a developed country to developing countries

• when imports exceed exports

• the dollar value of the final goods and services products produced in a country’s borders in a given year

• when exports exceed imports

Trade Deficit

• policy that promotes elimination of trade barriers, such as tariffs and quotas

• when imports exceed exports

• non-economic negative effects from trade

• when exports exceed imports

Gross Domestic Product (GDP)

• when a business transfers work overseas, usually from a developed country to developing countries

• when countries only produce what they are best at

• when one country produces a good at a lower opportunity cost than another

• the dollar value of the final goods and services products produced in a country’s borders in a given year

Outsourcing

• when one country produces a good at a lower opportunity cost than another

• when a business transfers work overseas, usually from a developed country to developing countries

• when one country can out produce another, despite using the same amount of resources

• when countries only produce what they are best at

Absolute advantage

• when a business transfers work overseas, usually from a developed country to developing countries

• when one country produces a good at a lower opportunity cost than another

• when one country can out produce another

• when countries only produce what they are best at