WBCSD

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-DEEP INTEGRATION elimination of trade barriers that stems from domestic policies, free movement of capital and labor
-FOREIGN DIRECT INVESTMENT one of two forms of capital, physical assets
-GROSS DOMESTIC PRODUCT annual value of goods and services produced and paid for inside of a country
-INDEX OPENNESS the ratio of trade to GDP, (exports + imports) /GDP
-REGIONAL TRADE AGREEMENT agreements between groups of nations, favors countries in the agreement against those outside
-SHALLOW INTEGRATION elimination of quotas and tariffs
-TRANSACTION COSTS costs of obtaining market information and achievement the agreement
-BRETTON WOODS CONFERENCE held in 1944, system of fixed exchange rates, gold-exchange standards until 1971, 44 nations, creation of IMF and WTO
-COMMON MARKET free trade and free mobility of inputs, capital and labor
-CUSTOMS UNION free trade and common external tariff
-ECONOMIC UNION free trade, coordination of economic policies, common standards
-FREE RIDING no paying for public good because one cannot be excluded from consumption
-FREE TRADE AREA free trade, no tariffs and quotas
-FOREIGN EXCHANGE RESERVES currencies used to pay for imports of goods
-GATT General Agremeent on Trade and Tariffs,
-INSTITUTIONS organization or society set up for a particular reason
-IMF CONDITIONALITY the changes in economic policy (to reduce trade deficit) that borrowing nations are required in order to get loans form the IMF
-IMF Bretton Woods institution responsible for helping members that suffer from problems with balance of payments
-LENDER OF LAST RESORT a place where nations can borrow when all commercial sources have dried out
-MOST FAVORED NATION concept of nondiscrimination, WTO requires each of its members to treat its trading partners equally
-NATIONAL TREATMENT general mission of the WTO, insurance of market access, promotion of fair competition
-NONDIMINISHABLE/ NONRIVAL not being diminished by consumption, characteristic of public good
-NONDISCRIMINATION WTO requires each of its members to treat its trading partners equally
-NONEXCLUDABLE price mechanism does not work to regulate access, characteristic of public good
-PARTIAL TRADE AGREMEENT group of countries agree to liberalize trade in a selected group of categories
-PUBLIC GOODS norival and nonexcludable goods
-QUOTA quantitative restriction on imports
-TARIFFS taxes on imports
-TRADE BLOC regional trade agreement
-TRADE ROUNDS meetings at which countries negotiate incremental tariffs reduction
-URUGUAY ROUND 1986-1993, tariff reduction, reduction of subsidies to agriculture, intellectual property rules
-WORLD BANK Bretton Woods institution which help developing countries
-WORLD TRADE ORGANIZATION formed in 1995 in place of GATT aims to reduce restrictions in trade
-AUTARKY no trade, situation in which country is self-sufficient
-COMPETITIVE ANDVANTAGE the ability to sell good at the lowest price
-ECONOMIC RESTRUCTURING a movement from one point to another along county’s PPC
-GAINS FROM TRADE increase in consumption due to specialization and trade
-LABOR PRODUCTIVITY the amount of output per unit of labor input
-MERCANTILISM stressed to need to run trade surpluses (increase exports and decrease imports), trade is a zero sum game
-OPPORTUNITY COST the value of the best forgone alternative to the activity actually chosen
-PRICE LINE/ TRADE LINE the rate at which one good trades for another in a two good model, the slope of the price line is the relative price
-PRODUCTION POSSIBILITIES CURVE the maximum output possible given the available inputs
-RELATIVE PRICE the price of one good in terms on another (how much of one to obtain another)
-TRADE ADJUSTMENT ASSISTANCE government programs that offer temporary assistance to those taht lost their job because of trade
-ZERO SUM the cost and benefit cancel each other
-DERIVED DEMAND the demand of a good or service that is derived from something else
-FACTOR ABUNDANCE relatively more of particular factor then another economy
-FACTOR SCARCITY relatively less of particular factor then another economy
-HECKSHER-OHLIN THEORY theorem that states that countries will export products in which they have factor abundance and import products in which they factor scarcity
-INTRA-FIRM TRADE international trade between divisions of the same company located in two different countries
-MAGNIFICATION EFFECT rise or decline in prices has greater effect on the income of the factor used in production
-PRODUCT CYCLE manufactured goods that go through R&D, followed by stabilization and standardization.
-SPECIFIC FACTORS MODEL a model that allows mobile and immobile factor of production
-STOLPER – SAMUELSON THEOREM states that changes in import or export prices lead to change in the income of the factors use in production
-AGGLOMERATIONS regional concentrations of firms
-EXTERNAL ECONOMIES OF SCALE all the firms experience declining average costs as the
-INTRAINDUSTRY TRADE international trade of the products form the same industry
-MARKET FAILURE a situation in which markets do not produce the most beneficial economic outcome
-MONOPOLISTIC COMPETITION many firms, competition between differentiated products
-OLIGOPOLY few producers so each can influence the market price
-PRIVATE RETURNS value of private benefits minus private costs
-PRODUCT DIFFERENTIATION two products that serve similar purpose but that are different in one or more dimensions
-RENT SEEKING activity that is designed to alter the distribution of income to their favor
-SOCIAL RETURNS private returns + cost and benefits to the elements of the society
-STRATEGIC TRADE POLICY he use of trade barriers or subsidies to capture the profits of foreign firms for domestic firms
-VALUE ADDED the price of the good minus the value of intermediate goods


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