International Trade and Money summary Questions and Answers 2023

Trade - -The exhcange of goods and services between countries . -Absolute advantage - -A situation in which one country can produce more of a product than another even if both have the same resources. -Comparative advantage - -A situation in which one country can produce a product at a lower opportunity cost than another country -World Trade Organization - -International organization that encourage the reduction of trade barriers between its member nations. -Free trade - -Trade between different countries without any government restrictions such as tariffs and quota. -Protectionism - -The practice of imposing restrictions on the free import and export of products in order to support domestic firms. -Dumping - -Selling goods overseas at a price lower than the cost of production. -Infant industry argument - -Government protecting new industries in order to make the industries internationally competitive by giving them time to become efficient. -Specialization - -where a country focuses on the production of a relatively small range of products.