20.8 KEY TERMS

image | interactive activity

Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.

Question

Imports
Exports
Globalization
Hyperglobalization
Ricardian model of international trade
Autarky
Factor intensity
Heckscher–Ohlin model
Domestic demand curve
Domestic supply curve
World price
Exporting industries
Import-competing industries
Free trade
Trade protection (protection)
Tariff
Import quota
Balance of payments accounts
Balance of payments on current account (current account)
Balance of payments on goods and services
Merchandise trade balance (trade balance)
Balance of payments on financial account (financial account)
Foreign exchange market
Exchange rates
Appreciation
Depreciation
Equilibrium exchange rate
Real exchange rate
Purchasing power parity
industries that produce goods or services that are sold abroad.
the exchange rate at which the quantity of a currency demanded in the foreign exchange market is equal to the quantity supplied.
trade that is unregulated by government tariffs or other artificial barriers; the levels of exports and imports occur naturally, as a result of supply and demand.
the price at which currencies trade, determined by the foreign exchange market.
the difference between the value of exports and the value of imports during a given period.
a situation in which a country does not trade with other countries.
the phenomenon of extremely high levels of international trade.
industries that produce goods or services that are also imported.
a supply curve that shows how the quantity of a good supplied by domestic producers depends on the price of that good.
the difference between a country’s exports and imports of goods alone—not including services.
a rise in the value of one currency in terms of other currencies.
a tax levied on imports.
International transactions that involve the sale or purchase of assets, and therefore create future liabilities.
the market in which currencies can be exchanged for each other.
goods and services purchased from other countries.
goods and services sold to other countries.
a fall in the value of one currency in terms of other currencies.
the phenomenon of growing economic linkages among countries.
a summary of a country’s transactions with other countries, including two main elements: the balance of payments on current account and the balance of payments on financial account.
(between two countries’ currencies) the nominal exchange rate at which a given basket of goods and services would cost the same amount in each country.
a model that analyzes international trade under the assumption that opportunity costs are constant.
a demand curve that shows how the quantity of a good demanded by domestic consumers depends on the price of that good.
the difference in the ratio of factors used to produce a good in various industries. For example, oil refining is capital-intensive compared to clothing manufacture because oil refiners use a higher ratio of capital to labor than do clothing producers.
a model of international trade in which a country has a comparative advantage in a good whose production is intensive in the factors that are abundantly available in that country.
a legal limit on the quantity of a good that can be imported.
policies that limit imports.
the price at which a good can be bought or sold abroad.
transactions that don’t create liabilities; a country’s balance of payments on goods and services plus net international transfer payments and factor income.
the exchange rate adjusted for international differences in aggregate price levels.