International Trade

Question	Answer
An Import	An import is a good or service purchased by residents of a country that causes money to go out of the country
An export	An export is a good or service purchased by residents of a country that causes money to go out of the country
Domestic Price	the equilibrium price that would occur in a country if no international trade is allowed
World Price	the equilibrium price on the international market
Open Economy	an economy that engages in international trade
Small Open Economy	an economy that participates in international markets for goods and services, but its production or consumption is small enough compared to the rest of the world that its supply or demand does not affect the world price
Closed Economy (autarky)	an economy that does not engage in international trade
Gains from Trade	the extra total surplus available in an open economy situation compared to a closed economy
Import Quota	a quantity limit on the amount of goods or services permitted to be imported
Benefits of engaging in trade	1. more goods for consumer 2. producer can sell to a larger market 3. monopolies or oligopolies might face international competition 4. flow of ideas and technology is faster and easier
Import Tariff	a tax on imported goods or services

Resource summary

	Created by Natalia Djohari over 9 years ago

	Copied by Stephen Gallagher almost 7 years ago