Specialization

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Trade restrictions

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The U$.$S$.$ has recently imposed duties on Chinese steel accusing the country of supplying the product at artificially low prices which are below$$the cost of production. If China is in fact doing this, the practice is called $\_\_\_\_\_\_$

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Currency depreciation

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Imports exceed exports

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Currency appreciation

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In August $2018,$ the U$.$S$.$imported $$297$ million$$and exported $$703$ million worth of nuts

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Absolute Advantage

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David Ricardo

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Comparative Advantage

$1.$

Results from a country's ability to produce a good or service at a lower opportunity cost than others

$2.$

Trade deficit occurs$$

$3.$

Leads to a decline in export and a rise in import

$4.$

Tariffs and quotas

$5.$

Results from a country's ability to produce a good or service more efficiently than others

$6.$

When a country moves resources to producing goods and services in which it has comparative advantages

$7.$

Encourages export$$

$8.$

All countries including those which may be relatively inefficient$$benefit from specialization and free trade

$9.$

Intra$-$industry trade

$10.$

Dumping

$11.$

Retaliatory measure

$12.$

Budget deficit

$13.$

Competitive advantage

$14.$

Since efficiency is the basis for trade, countries must focus on producing goods and services$$in which they have absolute advantage.

$15.$

Example of value chain