701646
Description
Flashcards by bella.calonje, updated more than 1 year ago
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Created by bella.calonje
over 10 years ago
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| Question | Answer |
| Aims of the WTO | administer WTO trade agreements be a forum for trade negotiations handle trade disputes among member countries monitor national trade policies provide technical training and assistance for developing countries cooperate with other international organizations |
| Define free trade | free trade takes place when there are no barriers to trade and goods and service are allowed to move freely between countries |
| Define Tariff | A tax placed on imported goods |
| Define Quota | a physical limit on the number/value of goods that can be imported into a country |
| Define subsidy | A subsidy is an amount of money paid by the government to a firm per unit of output to decrease costs of production |
| Define dumping | the selling by a country of large quantities of a commodity at a price lower than its production cost in another country |
| Define Exchange rate | Is the value of one currency expressed in the value of another currency |
| Define a fixed exchange rate | where the value of a currency is fixed or pegged to the value of another currency |
| Define a floating exchange rate | where the value of the currency is allowed to be determined solely by the demand for and supply of the currency on the foreign exchange market |
| Define the balance of payments account | is a record of the value of all the transactions between the residents of one country and the residents of all the other countries in the world over a given time period |
| define the current account | a measure of the flow of funds from trade in goods and services plus other income flows |
| balance of trade in goods | measure of the revenue received from the export of goods minus the expenditure on the imports of tangible goods |
| Balance of trade in services | Measure of the revenue received from the exports of services minus the expenditure on the imports of services over a given time period |
| Expenditure switching Policies | Policies implemented by the government that attempt to switch the expenditure of domestic consumers away from imports towards domestically produced goods and services |
| Expenditure reducing policies | any policies implemented by the government that attempt to reduce overall expenditure in the economy |
| PTA | a trading bloc that gives preferential access to certain products from certain countries |
| FTA | agreement made between countries where the countries agree to trade freely among themselves but are able to trade with countries outside of the free trade area |
| Customs Unions | agreement made between countries where the countries agree to trade freely amongst themselves and they adopt common external barriers against any country attempting to import |
| Common markets | a common market is a customs union with common policies on product regulation, and free movement of goods, services, capital and labour |
| economic and monetary union | common market with a common currency and a common central bank |
| Define trade creation | occurs when the entry of a country into a customs union leads to the production of a good and service transferring from a high cost producer to a low cost producer |
| Define Trade diversion | occurs when the entry of a country into a customs union leads to the production of a G or S transferring from a low cost producer to a high cost producer |
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