Macroeconomics Chapter 28,29, & 30

Each nation specialized in a product for which its opportunity cost is lower in terms of the production of another product and the nations trade.

Benefits a nation as a whiling but individuals may lose jobs and incomes from the competition from foreign goods and services.

A government’s use of embargoes, tariffs, quotas, and other methods to protect particular domestic industries by imposing barriers that reduce imports.

Prohibits the import or export of particular goods.

Discourages imports by making them more expensive.

A summary bookkeeping record of all the international transactions

Measures only merchandise goods (not services) that a nation exports and imports. It is the most widely reported and largest part of the current account

Is the price of one nation’s currency in terms of another nation’s currency. The intersection of the supply and demand curves for dollars determines the number of units of a foreign currency per dollar

Occurs when a currency becomes worth fewer units of another currency

occurs when a currency becomes worth more units of another currency

A limit on the quantity of a good that may be imported in a given time period

The set of established procedures by which s society answers the What, How, and For whom to produce goods questions

Based on decisions made according to customs

Answers the three economic questions through some some powerful central authority.

Uses the impersonal mechanism of the interaction of buyers and seller through markets to answer the what, how, and for whom questions

An economic system in which the factors of production are privately owned, and economic choices are made by consumers and firms in markets

The determination by consumers of the types and quantities of products that are produced in an economy

Describes and economy which the government owns the factors of production. The central authorities make the myriad of society’s economic decisions according to a national plan

An economic system envisioned by Karl Marx to be an ideal society in which the workers own all the factors of production. Marx believed that workers who worked hard would be public spirited and voluntarily redistribute income to those who are less productive.

A phrase that expresses the belief that the best interests of a society are served when individual consumers and producers compete to achieve their own private interests

An economic system that answers the what, how, and for whom questions through a mixture of traditional, command, and market systems

The value of final goods produced (GDP) divided by the total population

High-income nations which have market economies based on large stocks of technologically advanced capital and well-educated labor

Nations without large stocks of technologically advanced capital and well educated labor. LDCs are economies based on agriculture such as most countries of Africa, Asia, and Latin America

A trap in which countries are poor because they can’t afford to save and invest, but they can’t save and invest because they are poor.

Capital goods usually provided by the government, including highways, bridges, waste and water systems, and airport

The transfer of money or resources from one government to another for which no repayment is required

The agency of the U.S. State department that is in charge of U.S. aid to foreign countries

Is the lending agency that makes long-term low-interest loans and provides technical assistance to less-developed countries

Is the lending agency that makes short-term conditional low-interest loans to developing countries