Term
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Definition
| Price of a good that prevails in the world market |
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Term
| If domestic price is below world price.... |
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Definition
| domestic price rises to world price, and producers have a surplus that they can export to other countries. |
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Term
| For exporting countries, producers are _____ off than consumers |
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Definition
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Term
| If world price is below domestic price... |
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Definition
| then domestic price falls to meet world price, creating a shortage of goods that must be imported from other countries |
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Term
| For importing countries, producers are _____ off than consumers |
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Definition
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Term
| With trade, overall gain _____ the losses. |
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Definition
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Term
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Definition
| a tax on goods produced abroad and sold domestically |
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Term
| A tariff can raise the price of a good to where it would be... |
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Definition
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Term
| Tariffs ______ the number of imports, and domestic sellers are ____ off. |
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Definition
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Term
| Because a tariff is a tax, it also creates... |
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Definition
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Term
| Tariffs create incentives for domestic producers to.... |
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Definition
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Term
| When a country trades, domestic prices drive to meet.... |
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Definition
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Term
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Definition
| Depends on whether the price must fall or rise to meet world price. Total welfare, however, increases. |
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Term
| Other Benefits from Trade: Increased Variety of Goods |
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Definition
| varieties from other countries. |
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Term
| Other Benefits from Trade: Lower Costs Through Economies of Scale |
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Definition
| Things made in bulk are cheaper, and a world marker is better equipped for large productions. |
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Term
| Other Benefits from Trade: Increased Competition |
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Definition
| Less market power, more competition |
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Term
| Other Benefits from Trade: Enhanced Flow of Ideas |
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Definition
| People trade ideas too, make everyone better. |
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Term
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Definition
| Importing goods can destroy domestic jobs |
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Term
| The National Security Argument |
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Definition
| If a country became dependent on another country for materials to make weapons, and then engaged in war with that country, they'd have little means of protection. |
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Term
| The Infant Industry Argument |
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Definition
| Trade restrictions can help starter companies get on their feet, until they can compete on a global scale. |
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Term
| The Unfair Competition Argument |
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Definition
| Different countries have different trade laws, possibly making certain trades unfair. |
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Term
| The Protection as a Bargaining Chip Argument |
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Definition
| Threat of trade restrictions can help remove previous trade restrictions |
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Term
| Unilateral approach to remove trade restrictions |
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Definition
| A country removes restrictions on its own. |
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Term
| Multilateral approach to remove trade restrictions |
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Definition
| reducing trade restrictions while other countries do the same. |
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Term
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Definition
| North American Free Trade Agreement: lowered trade barriers in Canada, U.S., Mexico |
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Term
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Definition
| General Agreements on Tariffs and Trade: many nations negotiate to promote goal of free trade. |
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Term
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Definition
| World Trade Organization: Administers trade, negotiates, and handles disputes. |
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