Trade
A benefit of free trade where producers can sell to a larger market (the world instead of just one country).
What are Economies of Scale?
Agreements that give preferential access to certain products from certain countries by reducing tariffs or by other agreements related to trade.
What are Preferential Free Trade Agreements?
The value of one currency expressed in terms of another.
What is the Exchange Rate?
Record of all money entering the country (credit) and leaving the country (debit).
What is the Balance of Payment?
An increase in welfare. This includes wealth but also quality of life.
What is Economic Development?
Producing goods yourself instead of importing them. One of the contributions to development.
What is Import Substitution?
What is the World Trade Organization?
Countries are able to trade freely among themselves.
What is a Free Trade Area?
System where the value of an exchange rate is determined by the demand for and supply of that currency.
What is a Floating Exchange Rate System?
The inflows from investments from abroad against investment to abroad.
What is the Financial Account?
A universal call to action to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity. There are 17 different objectives.
What are the Sustainable Development Goals?
Long-term investments by multinational corporations (MNCs) in foreign countries by either building new plants or expanding existing ones.
What is Foreign Direct Investment (FDI)?
A tax charged on imported goods.
What is a Tariff?
Countries are able to trade freely among themselves and also agree to adopt common external barriers against ay country outside the union.
What is a Customs Union?
System where the value of the currency is fixed to the value of another currency.
Miscellaneous income or expenses that can't be placed in any other category.
What is the Capital Account?
Any connected combination of barriers to growth/development that creates a circle. Self-perpetuating unless circle can be broken.
What is a Poverty Trap/Cycle?
Foreign Aid in the form of food, medical supplies, and emergency relief.
Sum of money given to producers.
What is a Subsidy?
Common market with common currency and common central bank.
What is a Monetary Union?
System where the exchange rate is freely floating but there are times of government intervention to influence the value of the exchange rate.
What is a Managed Exchange Rate System?
Inflows of trade and income against outflows. Consists of balance of trade in goods and services, income, and current transfers.
What is the Current Account?
The average number of years a person may expect to live from the time that they are born.
What is Life Expectancy at Birth? (a health indicator)
Foreign Aid in the form of money to invest in development, support for schools/hospitals, and support for specific sectors of the economy.
What is Development Aid?
A limit on imported goods.
What is a Quota?
Countries have no control of economic policy, full monetary union with complete harmonization of fiscal policy (economically, no difference between countries).
What is Complete Economic Integration?
When the value of a currency increases in a Floating Exchange Rate System.
What is 'Appreciation'?
A current account deficit could cause any of the following:
Downward pressure on the domestic currency exchange rate; Increase in debt; More foreign ownership of domestic assets.
A number between 0 and 1 the consists of:
*Long and healthy life (measure by life expectancy)
*Education (measured by literacy rate and school enrollment)
*Standard of Living (measured by GDP per capita)
What is the Human Development Index?
Outstanding loans that a country owes to other countries or other countries' institutions.
What is Foreign Debt?