The Global Economy
The interconnected economies of the nations of the world.
What is the global economy?
The activity of buying and selling goods and services in domestic or international markets.
What is trade?
To focus on a particular activity, area, or product.
What is to specialize?
The practice of the government putting limits on foreign trade to protect business at home.
What is protectionism?
Occurs when there are few or no limits on trade between countries.
What is free trade?
Involves the exchange of goods and services between nations.
What is international trade?
The production, purchase and sale of goods and services within a country.
What is domestic trade?
The difference in value between a country's imports and exports over a period of time.
What is the balance of trade?
A tax placed on imports to increase their price in the domestic market.
What is a tariff?
Alliance between United States, Canada and Mexico, known as NAFTA.
What is the North American Free Trade Alliance?
A company that does business in many countries and has facilities and offices around the world.
What is a multinational corporation?
The goods and services that one country sells to another country.
What are exports?
The ability of a country or company to produce a particular good more efficiently than another country or company.
What is a comparative advantage?
a limit placed on the quantities of a product that can be imported.
What is a quota?
Alliance between Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom, also known as the UE.
What is the European Union?
An example of a multinational corporation.
What is Sony/McDonalds/Coca-Cola/Nike/Toyota etc?
Goods and services that one country buys from another country.
What are imports?
Another name for money according to the text book.
What is currency?
A ban on the import or export of a product. Rare and usually used against another country for political or military reasons.
What is an embargo?
Alliance between Brunei, Combodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam, also know as ASEAN.
What is the Association of Southeast Asian Nations?
Opens up new markets in other countries. Creates new jobs. Forces businesses to be more efficient and productive. Gives more choices in variety, prices and quality of products. Promotes cultural understanding and encourages cooperation. Raises a country's standard of living.
What are the benefits of free trade?
Better transportation and telecommunication, along with a decrease in trade barriers.
What are the reasons world trade is easier?
The price at which one currency can buy another currency.
What is the exchange rate?
Foreign competiton can lower the demand for products made at home. Companies at home need to be protected from unfair foreign competition. Industries that make products related to national defense need to be protected. the use of cheap labor in other countries can lower wages or threaten jobs at home. A country can become too dependent on another country for important products such as oil, steel or grain. Other countries might not have the same environmental or human rights standards.
What are reasons to restrict trade?
Several countries merge their economies into one huge market. For example NAFTA, UE, or ASEAN.
What are trade alliances?