Vocab
This term means the voluntary exchange of goods and services.
trade
Trading with only a limited number of countries.
limited trade
When a country focuses on producing a small number of goods instead of everything.
specialization
This is used to measure a country’s standard of living.
GDP per capita
The main reason countries trade with each other.
to get goods and services at a lower cost.
When a country sends its goods or services to another country.
export
Trading with as many countries as are willing to trade with you.
unlimited trade
Specialization causes countries to rely on others for goods they don’t produce. This is called:
interdependence
Why is GDP per capita more helpful than GDP when comparing countries?
it accounts for population
meeting wants and needs.
When a country receives goods or services from another country.
import
A country that trades with many countries usually has this type of trade.
unlimited trade
If a country grows mostly wheat, it may trade for electronics. This is an example of:
specialization
A country with a high GDP but a very large population may have this.
a lower gdp per capita
how does trade help consumers
provides more choices at lower costs.
The total market value of all final goods and services produced in a country in one year.
GDP
This type of trade may limit the variety of goods a country can get.
limited trade
Relying on other countries for oil, food, or technology is an example of this idea.
interdependence
If two countries have the same GDP, which one has a higher GDP per capita?
the one with the smaller population
how does trade help producers
access to more buyers and markets
How much of a country’s GDP is available for each person and is used to measure standard of living.
GDP per capita
Countries that trade freely with many partners often have more choices and lower prices because of this.
unlimited trade
Why does specialization encourage trade?
countries must trade to get goods they don’t produce
What does a high GDP per capita usually tell us about people’s lives?
they have a higher standard of living.
When countries focus on what they do best.