International Economics Flashcards

Only 10 flashcards are shown at a time! Once you’ve mastered these 10 Economic terms, click the shuffle button below for 10 new terms. There are approximately 60 flashcards covering International Economics

Financial account
Click to view the definition
Click to view the Economic term

Measures the flow of funds for investment in real assets (such as factories or office building) or financial assets (such as stocks and bonds) between a nation and the rest of the world.

Financial account
Productivity
Click to view the definition
Click to view the Economic term

The output per unit of input of a resource. An important determinant of the level of aggregate supply in a nation. Will increase as a result of better or more capital, education and health, all which add to the human capital of a nation.

Productivity
Absolute advantage
Click to view the definition
Click to view the Economic term

When a country or individual has can produce a good using fewer resources than another country or individual

Example: With 100 acres of land, the United States can produce 20,000 bushels of rice, while China can produce 30,000 bushels of rice on 100 acres. China has an absolute advantage in the production of rice.

Absolute advantage
Trade deficit
Click to view the definition
Click to view the Economic term

When a country’s total spending on imported goods and services exceeds its total revenues from the sale of exports to the rest of the world. Another term for current account deficit in the balance of payments.

Trade deficit
Devaluation
Click to view the definition
Click to view the Economic term

When a government or a central bank intervenes in the market for its own currency to weaken it relative to another currency or currencies. May be achieved through measures such as reducing domestic interest rates, selling the currency on foreign exchange markets, or imposing foreign exchange controls that limit the amount of foreign investment in the country, reducing demand for the currency abroad.

Devaluation
Improvement in terms of trade
Click to view the definition
Click to view the Economic term

When the price of a nation’s exports rises relative to the price of its imports. May result in an improvement in the current account balance if demand for the country’s exports is inelastic relative to its import demand, or a worsening in the current account balance if export demand is elastic relative to import demand.

Improvement in terms of trade
Tariff
Click to view the definition
Click to view the Economic term

Taxes placed on goods imported from other countries. Meant to protect domestic producers from foreign competition.

Tariff
Official reserves
Click to view the definition
Click to view the Economic term

Foreign currencies held by a nation’s central bank, resulting from accumulations in the current account and the financial account in the nation’s balance of payments. To balance the two accounts in the balance of payments, a country’s official foreign exchange reserves measures the net effect of all the money flows from the other accounts.

Official reserves
Exchange rate
Click to view the definition
Click to view the Economic term

The price of one currency in terms expressed in terms of another currency, determined in the forex market.

Exchange rate
Quota
Click to view the definition
Click to view the Economic term

A physical limit on the quantity of a good produced in a foreign country allowed to be imported. Meant to restrict imports, allowing domestic producers to sell a greater quantity on the domestic market.

Quota

SHOW ME 10 NEW FLASHCARDS!!

Study Flashcards for a specific unit:

Leave a Comment