Term
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Definition
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Term
What is international trade? |
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Definition
The exchange of goods and services between countries |
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Term
What roles do exporters and importers play in international trade? |
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Definition
Exporters deliver goods; importers make payments |
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Term
Why do countries engage in international trade? |
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Definition
To utilize resources more efficiently and obtain products not available domestically or at better prices |
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Term
What is specialization in the context of international trade? |
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Definition
Producing certain goods based on resource availability and quality, then trading for others |
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Term
How does trade increase overall economic well-being? |
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Definition
By providing a greater selection of goods and services at lower costs |
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Term
What are consumer surplus and producer surplus? |
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Definition
Measures of economic well-being, where consumer surplus benefits consumers and producer surplus benefits producers |
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Term
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Definition
An early economic philosophy advocating for exporting more than importing |
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Term
Who opposed mercantilism and what did they advocate? |
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Definition
Adam Smith; he advocated for free trade and specialization based on absolute advantage |
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Term
What is the concept of comparative advantage? |
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Definition
A country can benefit from trade by specializing in goods where it has a relative advantage, even if it has an absolute disadvantage |
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Term
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Definition
Measures like tariffs, quotas, and non-tariff barriers introduced by governments to protect domestic industries |
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Term
What is the Balance of Payments (BOP)? |
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Definition
A statistical statement recording a country's economic transactions with the rest of the world |
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Term
What does the Balance of Payments consist of? |
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Definition
The current account and the capital and financial account |
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Term
What are foreign exchange reserves? |
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Definition
Assets held by a central bank in foreign currencies to back liabilities and influence monetary policy |
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Term
What is currency convertibility? |
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Definition
The ease with which a country's currency can be converted into another currency |
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Term
What are the two types of currency convertibility? |
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Definition
Partial and full convertibility |
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Term
Since when has the Bangladesh Taka been convertible on the current account? |
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Definition
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Term
What does international banking involve? |
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Definition
Cross-border business in any currency and local business in foreign currencies |
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Term
What are the four main international trade payment methods? |
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Definition
* Cash in Advance * Open Account * Documentary Collection * Documentary Credit |
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Term
What role do banks play in international trade? |
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Definition
Facilitating payments, providing financing services, and offering risk management services |
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Term
True or False: Trade barriers always benefit free trade. |
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Definition
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