Vocabulary
Goods brought into the country
What are Imports?
The side effects of producing or consuming a good or service
What is an Externality?
A country can produce more goods than the other
What is an Absolute Advantage?
Some one that supports trade between countries
What is a Free-Trader?
Agreement between countries to promote trade and cooperation
What is a Trade Bloc?
A tax placed on imports or exports
What is Tariffs?
Ex) pollution
What is Negative Externality?
Colombia can produce more coffee beans than Mexico
What is an Absolute Advantage?
Someone that is against trading with other countries
What is Protectionist?
Treaty signed between Canada, Mexico, and the U.S. in 1992
What is NAFTA?
Increasing interconnectedness and interdependence between countries
What is Globalization?
The people that are affected by externalities
What are Third-Parties?
Countries focus on this advantage when they trade
What is Comparative Advantage?
Free-Traders believe in this level of intervention in trade
What is None?
Group that regulates most of the petrolium/oil trade in the world
What is Organization of the Petroleum Exporting Countries (OPEC)?
Countries specialize in producing the goods and services they can produce at a lower opportunity cost
What is Comparative Advantage?
Benefits include being potentially more employable and able to earn a living
What is Externality of Education?
It costs Saudi Arabia 4 barrels of oil to produce 1 bushel of corn, but the U.S. 1/2 barrel to produce a bushel. Which country has the comparative advantage?
What is the U.S.?
Main argument for protectionism
What is Protecting Domestic Jobs?
Treaty that replaced NAFTA
What is United States-Mexico-Canada Agreement (USMCA)?
Increase in value of one currency relative to another currency
What is Appreciation?
Taxes, Subsidies, and Regulations
What are Ways to Control Externalities?
Country focuses on producing fewer variety of goods
What is Specialization?
Limited quantity of goods to be traded
What is a Quota?
Intergovernmental organization in Switzerland that regulates trade
What is World Trade Organization (WTO)?