| A | B |
|---|
| Absolute advantage | Ability to produce more of a given product |
| Comparative advantage | Ability to produce more efficiently w/ lower opportunity cost |
| Trade barrier | Means of preventing a foreign porduct from freely entering the country |
| Import quota | Limit on the amount of a good that can be imported |
| Customs duty | Tax on certain items purchased abroad |
| Tariff | Tax on imports |
| Trade War | A cycle of increasing trade restrictions |
| Balance of trade | Relationship between a nation's exports & imports |
| European Union | Regional trade organization made up of European nations |
| Free-trade zone | Region where a group of countries have agreed to reduce or eliminate trade barriers |
| NAFTA | Eliminates trade barriers between the major North American countries |
| Exchange rate | Value of a foreign nation's currency in terms of the home nation's currency |
| Appreciation | Increase in the value of currency |
| Depreciation | Decrease in the value of currency |
| Trade surplus | Nation is exporting more than it is importing |
| Trade deficit | Nation is importing more than it is exporting |
