Macroeconomics Unit 5: International Economics

Key Concepts and Questions:

Ø International Trade

Ø Why trade?

Ø Opportunity cost

Ø Free trade

Ø Comparative advantage

Ø Absolute advantage

Ø Specialization

Ø Standard of living

Ø Protectionism

Ø Trade barriers

Ø Tariffs

Ø Quotas

Ø Embargoes

Ø Boycotts

Ø Government regulations

Ø Trade war

Ø Special interest effect

Ø Balance of trade

Ø Trade deficit

Ø Trade surplus

Ø Autonomous transactions

Ø Accommodating transactions

Ø Balance of Payments

Ø Current accounts

Ø Capital accounts

Ø Credits Debits

Ø Exchange rates

Ø Net exports

Ø Strong dollar

Ø Weak dollar

Ø Bretton Woods

Ø Floating exchange rates

Ø Pegged exchange rates

Ø "Most Favored Nation Status"

Ø Devaluation of currency

Ø Reciprocal Trade Act 1934

Ø Fiscal policy and international trade

Ø Monetary policy and international trade

Ø European Economic Community (EEC)

Ø General Agreement on Trade and Tariffs (GATT)

Ø Arguments against free trade

Ø North American Free Trade Agreement (NAFTA)