| A | B |
|---|
| Absolute Advantage | – A situation in which one country can produce a particular good or service with less labor, capital, and other inputs than another country. |
| Comparative Advantage | The tendency of countries to specialize in the goods or services in which they have the biggest productivity advantage or the smallest productivity disadvantage. |
| Currency Appreciation | A change in an exchange rate showing one currency to buy more of another. |
| Currency Depreciation | A change in an exchange rate allowing one currency to buy less of another. |
| Disruptive Trade | Trade that imposes big economic and social adjustment costs. |
| Exchange Rate | The rate at which one currency can be converted into another. |
| Floating Exchange Rate | An exchange rate between two currencies that is set in the financial markets. |
| Gains from Trade | The benefits from participating in trade relationships with other countries. |
| Globalization | The increasing exchange of goods, services, ideas, and people among countries. |
| Infant Industry | A new or a small industry that is vulnerable to being crushed by better-funded and more mature foreign competitors. |
| Legal Barriers to Trade | Tariffs, quotas, and other government actions that limit trade or make it more expensive. |
| Natural Barriers to Trade | Obstacles to trade that include distance and differences in cultures. |
| Pegged Exchange Rate | Occurs when the government of one country manages its exchange rate to be fixed in relation to another currency. |
| Protectionism | The use of tariffs, quotas, or other barriers to trade to protect domestic jobs and businesses. |
| Quotas | Government-imposed disincentives to trade that include numerical limits on the number of imported products coming into a country. |
| Tariffs | Extra charges of taxes levied on imports by a country. |
| Trade Balance | The difference between exports and imports of goods and services. |
| Trade Deficit | Occurs when a trade balance is negative so that imports exceed exports. |
| Trade in Goods | Exchanges that occur when sellers physically ship items to another country. |
| Trade in Services | Exchanges that occur when a person or a company on one country provides a service to a resident of a different country. |
| Unfair Competition | In global trade, cases in which a foreign country favors its own exporting industries by lowering their taxes or giving them some other subsidy. |
