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more of a good or service than competitors, using the same amount of resources
International trade
Too goods
Law of comparative advantage - the individual, firm, region, or country with the
lowest opportunity cost of producing a particular good should specialize in that good
Import quota - a limit on the number of products in certain categories that a nation
can import
A raise in tariffs
Infant industry - a young industry that may need temporary protection from
competition from the established industries of other countries to develop an
acquired comparative advantage
Italy
Free-trade zone - area where people can buy goods from other countries without
paying extra taxes
When you dont have to pay taxes when trading with other countries
NAFTA - North American Free Trade Agreement; allows open trade with US, Mexico,
and Canada
Exchange rate - the charge for exchanging currency of one country for currency of
another
Foreign exchange market - The market in which the currencies of different countries
are bought and sold.
Fixed exchange rate system - a currency system in which governments try to keep
the values of their currencies constant against one another
Flexible exchange rate system - a currency system that allows the exchange rate to
be determined by supply and demand
United States
When China starts off by producing simple objects and as time goes on they
produce complex objects
Infant mortality rate - the death rate during the first year of life
Infrastructure - the stock of basic facilities and capital equipment needed for the
functioning of a country or area
Capital equipment
Growth of population
Countrys citizens
Foreign portfolio investment - the entry of funds into a country when foreigners
make purchases in the country's stock and bonds market
World Bank - a United Nations agency created to assist developing nations by loans
guaranteed by member governments
Increasing interest
Stabilization program - An agreement between a debtor nation and the IMF in which
the nation agrees to revise its economic policy
Special economic zones - specific area within a country in which tax incentives and
less stringent environmental regulations are implemented to attract foreign
business and investment