| A | B |
|---|
| austerity program | tax increases; spending cuts; things that lower the standard of living in order to higher it later on |
| balance of payments | what a country recieves compared to what it spends |
| currency devaluation | a planned drop in the value of a country's currency relative to other currencies; raises exports |
| debt service ratio | the ratio between a country's export earnings and the interest and principal payments it makes on foreign debts |
| debtor nation | when the flow of capital into a country exceeds the outflow |
| foriegn exchange | the exchange for local currency for a foreign currency; earn it by exporting goods and services for foreign money |
| gold exchange standard | an international agreement dating from 1944 that fixed the price of gold at $35 per ounce and valued all other currencies according to the dollar. |
| gross domestic product | the total value of goods and services sold within a country in a year |
| gross national product | dividing the total market value of all goods and services lproduced in one year by the country's population |
| import controls | controls such as tarriffs, duties, and health restrictions placed on the importation of goods and services from abroad |
| interest rate | the price paid for the use of money |
| international monetary fund | helps maintain stable exchange rates and acts as a lender of last resort to countries with serious balance of payment problems; in return countrires must undertake austerity programs or reforms |
| price and wage controls | govt. restrictions placed on increses in consumer prices and wages |
| price subsidies | govt. expenditures, especially for food, meant to reduce consumer prices. a govt. will purchase food and sell it at a loss in urban markets |
| privatization | the selling of publicly owned industry to the private sector; some third world countries sell their public industries to private owners in order to make them more profitable |
| recesssion | these often occur after periods of rapid or high economic growth rates and can be caused by a number of factors; high unemployment for example |
| tariff | a duty, tax place on imported goods |
| third world nations | countries that are in the process of economic development |
| trade defecit | negative trade balance; annual imports exceed exports |
| war reparations | payments by one country, usually the loser, to another to compensate it for damage during the war |
| the world bank | set up in 1945 by the united nations; used with 3rd worlod nations; used by all countries |
