trade
absolute advantage
producer that can produce the most outputs or requires the least inputs
forex shifter 1
changes in taste
more developed country
industrialized country's with high standards of living
stage 1- undeveloped economy
mostly subsistence farming. Little specialization and trade and low living standards
foreign aid
when a country receives money as a gift for military or economic assistance
absolute advantage
the producer can produce the most outputs or requires the least inputs
forex shifter 2
changes in relative incomes (more inports)
less developed country
country's with high poverty and lower standards of living
stage 2- developing economies
based on agriculture and limited manufacturing. death rates fall
foreign direct assistance
a business or individual in one country establishes business interests in another country
protectionism
the act of shielding a country's domestic industries from foreign competition
forex shifter 3
changes in relative price level (more inputs)
Stage 1: undeveloped economy
mostly subsistence farming. Very little specialization and trade with low living standards
stage 3- manufacturing based economy
farmers move to the cities to work in factories. Brith rates fall
stage 4- service based economy
economy based on service and finance population levels off
free trade
allowing domestic consumers to buy goods and services from other countries
forex shifter 4
changes in relative interest rates
stage 2: Developing economies
economy based on agriculture and limited manufacturing. Falling death rates
stage 4- service based economy
free trade
the act allowing domestic consumers to buy goods and services from other countrys
Comparative advantage
the producer with the lowest opportunity cost
appreciation/depreciation affects
if there is high inflation demand for pesos go down mexico looks for lower priced inports
stage 3- manufacturing economy
people move from farms to cities to work in factories. Falling birth rate
all forex shifters
changes in taste
changes in relative incomes
changes in relative price levels
changes in relative interest rates
protectionism
the act of shielding a country's' domestic industries from foreign competitors