Global Economy
What is the word that refers to the trade between countries and markets around the world?
Global economy
The ability of a country to produce more of a good or service than a competitor is called?
Absolute Advantage
Goods/services a country produces domestically & sells to customers in a foreign country are called?
Exports
This organization facilitates the resolution of international trade disputes and pushes for the liberalization of trade and the removal of trade barriers.
What is the World Trade Organization (WTO)?
Who has the absolute advantage in the production of chairs?
A
List one of the pros of global trade
Economic Growth, Access to Resources, or Better Global Cooperation.
What is when one country produces goods and services at lower opportunity costs than another country?
Comparative advantage
Goods/services brought from other countries to sell to a nations consumers are called?
Imports
This trade barrier is a tax or duty imposed on imported goods, usually with the intention of protecting domestic industries from foreign competition.
What is a tariff?
Who has the absolute advantage in the production of tables?
B
List two of the cons of global trade
Dependency, Job Loss, or Environmental Impacts.
List two factors leading to Absolute Advantage
Lower labor costs, access to an abundant supply of (natural) resources, a larger pool of available capital
A country is in a negative balance of trade if...? (trade deficit)
Value of imports > exports.
This trade barrier is a set of rules, regulations, licenses, or standards imposed by a country to make it difficult for foreign businesses to operate within its borders. It is often used to protect domestic industries from competition.
What is a non-tariff barrier?
Who has the comparative advantage in the production of potatoes?
China
How does global trade impact the environment?
Major shipping and transportation activities can lead to air and water pollution
China has a comparative advantage in production due to having a high amount of people doing labor for very cheap costs. How does their comparative advantage impact our everyday lives?
Many products we use today were made in China.
List 2 examples of what exports allow countries to do
Participate in global trade, discover new markets, increase revenue
This trade barrier is a limit on the quantity of a certain good that can be imported into a country. It aims to restrict foreign competition and protect domestic producers.
What is a quota?
Who has the comparative advantage in the production of wheat?
India
A country’s currency becomes weaker compared to another country’s currency. As a result, its exports become cheaper for foreign buyers and imports become more expensive for its own citizens.
What is an increase in exports and a decrease in imports?
What is specialization AND why do countries choose to specialize?
Give an example of an import to the U.S.
high-value machinery, automotive vehicles, consumer electronics, pharmaceuticals, and agricultural products like fresh fruit, coffee, household items, clothing/textiles, and seafood
These two kinds of trade barriers may cause import items to cost more, which may have a detrimental effect on customers' ability to make purchases
What are tariffs and quotas?
What good should each country import? What should they export?
China should export potatoes and import wheat. India should export wheat and import potatoes.