| A | B |
|---|
| domestic | The making, buying, and selling of goods and services within a country. |
| foreign | Business activities needed for creating, shipping, and selling goods and services across international borders |
| absolute advantage | Exists when a country can produce a good or service at a lower cost than other countries |
| comparative advantage | Exists when a country specializes in the production of goods and services at which it is relatively more efficient |
| imports | items brought into the US from other countries |
| exports | goods and services sold to other countries |
| foreign debt | the amount of money a country owes other countries |
| balance of trade | difference between a country’s total exports and total imports |
| balance of payments | difference between the amount of money that comes into the country and the amount that goes out of it |
| foreign exchange market | banks that buy and sell different currencies |
| exchange rate | the value of a currency in one country compared with the value in another |
