Test Bank International Economic - 1116 Words

Sovereignity- supreme amp; independent power or authority in government as possessed or claimed by a state or community. Being sovereign nations can be more indifferent to the interests of others. As long as nations exist, international economics will always need a separate body of analysis distinct from the rest of economies. Globalization- worldwide integration amp; development; extending to other or all parts of the world Euro Benefits * Low interest rates due to a high degree of price stability * More price transparency * Removal of transaction costs * No exchange rate fluctuations Disadvantages * Lack of strong Federal government * Two speed economies * To raise or lower interest rates *†¦show more content†¦If a consumer would be willing to pay more than the current asking price, then they are getting more benefit from the purchased product than they spent to buy it. The difference in the price that they would pay, if they had to, and the amount that they pay now is their consumer surplus. Allows us to quantify what the lower price is worth to consumers. Arbitrage- buying something in one market amp; reselling the same thing in another market to profit from a price difference Effects of consumers amp; producers- for the U.S (importing country) the shift from no trade to free trade lowers the market price U.S consumers benefit from this change amp; increase their quantity consumed. Comparative advantage- a nation, like a person, gains from trade by exporting the goods or services in which it has its greatest comparative advantage in productivity and importing those in which it has the least comparative advantages Production possibility curve- shows all the combinations of outputs of different goods and that an economy can produce with full employment of resources amp; maximum productivity. Pictures the production side of a country’s economy. Indifference curve- shows all the consumption points at which utility equals some constant. Each indifference curve is typically presumed to have a bowed shape. A country s factor endowment is commonly understood as the amount of land, labor, and capital that a country possessesShow MoreRelatedPersonal Finance959 Words   |  4 Pagesaccounting, 7/e martin ives terry k. Patton solutions manual and test bank Introduction to information systems 2e canadian ed rainer cegielski splettstoesser hogeterp sanchez rodriguez instructor manual Introduction to logic, 14e irving m. Copi solutions manual and test bank Introduction to managerial accounting 6e brewer garrison solutions manual and test bank introduction to organic and biochemistry, 8th edition solutions manual and test bank by frederick a. Bettelheim | william h. 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