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10 Cards in this Set
- Front
- Back
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International Trade |
Purchase sale or exchange of goods and services across national borders |
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Mercantilism |
states that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports |
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Absolute Advantage |
Smith- the ability for one country to carry out an economic activity more efficiently than others |
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Comparative Advantage- |
Ricardo- the ability of a country to carry out a particular economic activity more efficiently than another activity |
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Factor proportions theory- |
Hecksher- states that countries produce and export goods that require resources (factors) that are abundant and imports goods that require resources in short supply |
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International product life cycle |
theory states that a company will begin by exporting its product and later undertake foreign direct investment as the product moves through its life cycle. |
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new trade theory |
krugman- 1) there are gains to be made from specialization and increasing economics scale 2) the companies first to market can create barriers to entry 3) government may play a role in assisting its home companies |
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National competitive advantage |
theory states that a nations competitiveness in an industry depends on the capacity of the industry to innovate and upgrade |
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Porters diamond |
1) Factor conditions 2) Demand Conditions 3) Related and supporting industries 4) Firm Strategy, structure, and rivalry |
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zero sum game |
mercantalist nations believe that the worlds wealth was limited and that a nation could increase its share of a pie only at the expense of its neighbors |
