Unit 4 Test Review

Infrastructure is the basic set of support systems needed to keep an economy going.

Free trade allows countries to trade without embargos and tariffs

A foreign exchange rate is the price of one currency in the currencies of other nations.

Less developed countries have a lower GDP and a lower standard of living.

Absolute advantage is the ability of one trading nation to make a product more efficiently than another trading nation.

Ax export is a good or service produced in one country and purchased by another.

If the US dollar is depreciating (weak dollar), that is good for the US GDP.

If the US dollar is appreciating (strong dollar), that is good for the US GDP.

BONUS: The literacy rate of a country has a direct correlation between the economic growth of the country?

A situation in which producers in one nation depend on others to provide goods and services they do not produce is

Comparative advantage is the idea that a nation will specialize in what it can produce at a lower opportunity cost

BONUS: In less developed countries, the life expectancy age is lower than in developing countries.

1. Balance of Trade is the difference between a nation’s imports and exports

The three major trade agreements we discussed in class are

A foreign exchange market is where currencies of different countries are bought and sold.

The World Trade Organization

An import is a good or service produced in one country and purchase by another.

What are example of trade barriers?

Developed countries have a higher standard of living and higher GDP and industrialization.

Protectionism provides jobs to other countries to help grow GDP.