| 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.
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- 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 | policies that limit imports. the exchange rate at which the quantity of a currency demanded in the foreign exchange market is equal to the quantity supplied. goods and services sold to other countries. International transactions that involve the sale or purchase of assets, and therefore create future liabilities. (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. transactions that don’t create liabilities; a country’s balance of payments on goods and services plus net international transfer payments and factor income. 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. industries that produce goods or services that are also imported. a tax levied on imports. the exchange rate adjusted for international differences in aggregate price levels. a demand curve that shows how the quantity of a good demanded by domestic consumers depends on the price of that good. the difference between a country’s exports and imports of goods alone— industries that produce goods or services that are sold abroad. a situation in which a country does not trade with other countries. the price at which a good can be bought or sold abroad. a supply curve that shows how the quantity of a good supplied by domestic producers depends on the price of that good. the price at which currencies trade, determined by the foreign exchange market. the market in which currencies can be exchanged for each other. the difference in the ratio of factors used to produce a good in various industries. For example, oil refining is capital- goods and services purchased from other countries. the phenomenon of extremely high levels of international trade. the difference between the value of exports and the value of imports during a given period. a rise in the value of one currency in terms of other currencies. the phenomenon of growing economic linkages among countries. 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 fall in the value of one currency in terms of other currencies. a model that analyzes international trade under the assumption that opportunity costs are constant. 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. a legal limit on the quantity of a good that can be imported. |