Vocab 1
When a person/country can make the MOST with a given input, it's called?
Absolute Advantage
What is it called when you subtract imports from exports?
exports - imports
Balance of Trade
What is a complete ban on trade?
Embargo
What does it mean when a currency depreciates?
less valuable than another nation’s currency
If Katie makes 25 strawberries and Joe makes 35 strawberries, who has the absolute advantage? WHY?
Joe. He makes more strawberries.
What is a trade surplus?
What is NAFTA and who is in it?
North American Trade Agreement
USA, Canada, Mexico
What is a tax on imported goods that makes foreign goods more expensive?
Tariff
more valuable than another nation’s currency
Japan imposes a 10% tax on items imported from Thailand because Thailand can make shirts cheaper. What type of Trade Barrier is used?
Tariff
What is EU and where is it located?
European Union -- Europe
What is a trade deficit?
Imports > Exports
What is a limit on the amount of exports
Quota
What are arguments FOR free trade?
increases variety of goods & encourages efficiency, lower prices
Norway does not agree with North Korea's dictatorship and no longer trades any items with them. What type of trade barrier is Norway using?
Embargo
What is the price of one currency in another currency called?
Exchange Rate
What is free trade?
trade without restrictions among nations
What is a minimum requirements a product has to have?
Standard
What are arguments AGAINST free trade?
protects infant (new) industries, protects national security, protects domestic jobs, & protect “vulnerable groups”
The United States will only import children's toys that are made of safe plastics and paints and rejects toys made of harmful products. What type of trade barrier is being used?
Standard
What are laws or actions passed by governments to limit trade between nations called?
Trade Barriers
When a person/country that has the lowest opportunity cost when producing an item (lowest number), it's called?
Comparative Advantage
What is government payments to companies to help them compete with foreign businesses?
Subsidies
What makes the European Union different from NAFTA (other than the countries involved?
EU has a shared currency (EURO)
How do people against free trade want to save jobs?
Free trade allows for other countries to make products cheaper which causes companies that make the same item (that costs more) to lay off employees or even close permanently.