International Economics

Trade Deficit

A condition in international trade when the value of the imports into a nation is greater than the value of its exports.

Currency

The paper money and coins that make up the money supply of a nation.

Exchange Rate

The value of one currency expressed in terms of another.

Imports

These are goods that are brought into one country from another.

European Union

This is a political and economic group that was formed in 1992 to encourage cooperation between the 27 member states.

ASEAN

This is a political and economic organization of 10 countries in Southeast Asia to improve economic growth.

Trade Barrier

This is a restriction to regulate international commerce and business.

Unfavorable Balance Of Trade

This is a situation that exists when a country imports more than it exports.

Tariff

This is a tax on imported goods and is usually designed to protect domestic production of similar goods.

Protective Tariff

This is a tax on imported goods designed to prevent domestic companies from having to compete with foreign goods of lower price or superior quality.

Commodity Money

This is a type of money whose value comes from the item form which it is made, often precious metals such as silver or gold.

Quota

This is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time.

NAFTA

This is an agreement signed in 1993 to reduce tariffs between the United States, Canada, and Mexico.

Export

This is any good transported from one country to another.

Subsidy

This is financial assistance from the government to encourage the production of or the purchase of a good.

Trade

This is general name for the voluntary exchange of goods and or services.

Absolute Advantage

This is the ability of a nation or region to produce more of a certain product than another country or region.

Comparative Advantage

This is the ability of one country or region to specialize in producing a good that another country can produce for the purposes of trade.

Foreign Exchange Rate

This is the amount of currency that can be traded for another country's currency at any given time.

Purchasing Power

This is the amount that money can buy.

Balance Of Trade

This is the difference in the monetary value of exports and imports for a country.

Money

This is the legally accepted payment for goods and services.

Sanction

This is the name for a category of trade barriers that a country may impose on another country or countries.

Free Trade

This is the practice of goods being traded between countries without any (or with reduced) tariffs that might slow down trade.

Embargo

This is the process of prohibiting commerce and trade with another country. This is often done to affect the country to change an internal policy.

Balance Of Payments

This measures the flow of payments between one country and all other countries.

Trade Surplus

This occurs when a country exports more than it imports.

Fixed Exchange Rate

This occurs when the value of a currency is matched to another currency or other value, such as gold.