Flashcards
Theme 4 Key Terms
Cards in this deck (18)
- 1Globalisationthe ever increasing integration of the world's local, regional and national economies into a single international market
- 2Absolute Advantageexists when a county is able to produce a good more cheaply in absolute terms than another country
- 3Comparative Advantageexists when a country is able to produce a good more cheaply relative to other goods produced domestically than another country
- 4Terms of Tradethe ratio of export prices to import prices
or:
Index of export prices/Index of import prices X 100 - 5Theory of Comparative Advantagecountries will find it mutually advantageous to trade if the opportunity cost of production of goods differs
- 6Dumpingthe sale of goods at less than cost price by foreign producers in the domestic market
- 7Free Tradeinternational trade conducted without the existence of barriers to trade, such as tariffs or quotas
- 8Tariffa tax on imported goods
- 9Trade Barriersany measure which artificially restricts international trade
- 10Quotaa physical limit on the quantity of an imported group
- 11Devaluationa fall in the value of the currency when its pegged against other currencies
- 12Revaluationa rise in the value of the currency when its pegged against other countries
- 13Exchange controlscontrols on the purchase and sale of foreign currency by a country, usually through its central bank
- 14Free Trade Areaa group of countries between which there is free trade in goods and services but which allows member countries to set their own level of tariffs against non-member countries
- 15Expenditure Reducingin a balance of payments context, government policies to reduce the level of aggregate demand in order to reduce imports and boost exports
- 16J Curve Effectin the short term a devaluation is likely to lead to a deterioration in the current account position before it starts t improve
- 17Foreign exchange marketsthe markets, organised in major financial centres where countries are bought and sold
- 18Purchasing Power Parity Theorythe hypothesis that long run changes in exchange rates are caused by differences in inflation rates between countries
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- A-Level Economics (Theme 4) Flashcards on Theme 4 Key Terms, created by Alexander Wakefield on 12/11/2016.
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- Alexander Wakefield
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