Another
one:
1. Absolute
advantage: It is when a country is able to produce a particular good or service
using fewer resources than another country/ able to produce more of an output
using the same amount of resources as another country
2. Balance
of payments: An account that summarises all the financial transactions between
one country and the rests of the world
3. Bilateral
trade: Refers to trade that takes place between two countries
4. Capital
account/ financial account (already merged into one): One of the two accounts under the
balance of payments which records all the inflows and outflows of money related
to portfolio investment and direct investment
5. Common
Market: A group of countries which decide to bring their economies closer by
allowing free movement of goods, services, labours and capital, imposing common
external tariffs and also a more harmonised microeconomic policies (such as EU)
6. Comparative
advantage: It is when a country is able to produce a good or service at a lower
opportunity cost than another country
7. Common
external tariff: It is where all countries within the same trading bloc impose
the same level of tariffs against all products that come from non-member
countries
8. Current
account: One of the two accounts under the balance of payments which is made up
of trade in goods, trade in services, investment income and current transfers
9. Current
transfers: Payments and receipts of money which are do not involve the
transaction for goods and services
10. Custom
unions: A group of countries which decide to improve their trade relationships
by agreeing to reduce or eliminate tariffs among themselves while at the same
time impose a unified tariffs against non-members
11. Deficit:
A negative balance when expenditure exceeds income
12. Dumping:
The practice of selling a good in another country at a price which is lower
than the domestic or sometimes even at below cost
13. Economic/
Monetary Union: A group of countries who decide to bring their economies closer
together through the adoption of single currency (such as the Eurozone)
14. Embargo:
Ban on imports from particular countries usually upon political and military
reasons
15. Exports:
Goods and services that are produced domestically in one country and sold to
other countries
16. Free
trade: Cross border transactions that are not restricted or limited by import
control measures
17. Free
Trade Area (FTA): A group of countries which promote free trade among
themselves but which retain a separate set of trade barriers against other
countries
18. Foreign
reserves: Monetary assets that are controlled by the central bank which can be
used to finance payment imbalances and also stabilise the exchange rate
19. Globalisation:
It is the integration of world economies into a single market place where goods
and services, labours and capital have greater mobility
20. Imports:
Goods and services that are produced in foreign countries and consumed by
people in the domestic economy
21. Infant
industry argument: The idea that a newly set-up industry should be given time
to establish itself until it is more able to compete
22. Invisible
balance: Difference between the value of export and import of services
23. Multilateral
trade: Refers to trade that takes place between a number of countries
24. Net
errors and omissions: Transactions in the balance of payments that go
unrecorded
25. Net
investment income: Difference between the inflows and outflows of money related to income such as interests, profits and dividends
26. Political
union: It is the final stage of an economic integration where member countries
no longer have any individual control over monetary and fiscal policy as well
as the near-harmonisation of all legal issues (such as the USA, UNITED states)
27. Preferential
Trade Area (PTA): It is where a group of countries decide to improve their
trade relationships by agreeing to cut tariffs onto some of the products traded among themselves
28. Quota:
A physical constraint onto the amount of foreign goods that can be imported
into the country
29. Strategic
industry: Industries that the government considers to be very important for the
country’s economy or safety
30. Sunrise
industry/ infant industry: Industries that are new, fast growing and are
believed to be very important in the future
31. Sunset
industry/ declining industry: Industries that have passed their peak and are
now in decline with no realistic hope of recovery
32. Surplus:
A positive balance when income exceeds expenditure
33. Tariff:
A tax which is levied onto imported products to make them appear artificially
more expensive
34. Terms
of trade: The ratio of export prices to import prices
35. Trade
creation: Creation of new trade as a result of reduction or elimination of trade
barriers
36. Trade
diversion: It is where a certain amount of trade is lost as a result of the
imposition of trade barriers
37. Visible
balance: Difference between the value of export and import of goods
38. Voluntary
Export Restraints (VER): A decision taken by the exporting country to
voluntarily reduce its exports to another country
39. World
Trade Organisation (WTO): An organisation set up in 1995 to promote free trade
in the world through the reduction of trade barriers
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