Basics of trade
What are exports?
These are goods and services produced domestically but sold to buyers in other countries.
What is a tariff?
It is a tax placed on imported goods by a government to protect domestic industries.
What is the exchange rate?
This is the term for the price of one nation's currency expressed in terms of another nation's currency.
How many members are there in the EU?
27
Capital of Thailand
Bangkok
What are imports?
These are goods and services bought by domestic residents that were produced in foreign countries.
What is a quota?
This is a government-imposed trade restriction that places a strict physical limit on the number of goods that can be imported during a specific timeframe.
What is appreciated (or strengthened)?
When the US Dollar increases in value and can buy more Japanese Yen today than it did yesterday, the dollar has done this.
What is the WTO?
World Trade Organization. The only global international organization dealing with the rules of trade between nations.
Capital of Serbia
Belgrade
What is Opportunity Cost?
This core economic concept is defined as the value of the next best alternative you must give up when making a choice to produce one good over another.
What is a subsidy?
This is a direct payment or financial assistance given by a government to domestic businesses to help them lower their production costs and remain competitive.
What is depreciated (or weakened)?
When a currency falls in value relative to another currency in a free market system, it has done this.
What is FDI?
Foreign Direct Investment. The term used when a company from one country builds a factory or buys a business in another country.
Capital of Saudi Arabia
Riyadh
What is Absolute Advantage?
This is the ability of a country to produce a greater quantity of a good than its competitors using the exact same amount of resources.
What is an embargo?
Often used as a political punishment, this is a complete government order to ban all trade and commercial activity with a specific country.
What is a fixed (or pegged) exchange rate?
This type of exchange rate system occurs when a government officially ties the value of its currency to another major currency, like the US Dollar, or to the price of gold.
What is the IMF?
International Monetary Fund. The organization that monitors global exchange rates and provides bailout loans to countries in financial distress.
Capital of Australia
Canberra
What is Comparative Advantage?
This is the ability of a country to produce a specific good at a lower opportunity cost than its trading partners, forming the basis for mutually beneficial trade.
What is dumping?
This illegal or heavily penalized practice involves a country exporting a product at a price that is significantly lower than the price it charges in its own home market.
What is the Foreign Exchange Market (Forex/FX)?
Operating 24 hours a day, this is the specific, decentralized global market where all the world's currencies are traded.
What is the USMCA?
United States-Mexico-Canada Agreement . The modern free trade agreement that officially replaced NAFTA.
Capital of Madagascar
Antananarivo