International Trade and Public Policy - AP Microeconomics

Quantity of imports decreases. Higher prices reduce import demand.

$\frac{\text{Loss in Good Y}}{\text{Gain in Good X}}$. Measures what must be sacrificed to gain one unit.

Net Exports = Exports - Imports. Measures country's trade balance.

Consumer surplus decreases. Higher prices reduce consumer benefit.

Subsidy. Financial aid to boost domestic production.

World Trade Organization. International body governing global trade rules.

A treaty between two or more nations to outline trade terms. Formal contract reducing trade barriers.

Selling goods below production cost to capture market share. Predatory pricing to eliminate competition.

Export tariff. Tax on goods leaving the country.

Imports exceed exports. Negative net exports show trade imbalance.

Producer surplus increases. Limited imports raise domestic producer profits.

To reduce trade barriers. Promotes free market competition globally.

A permit allowing the importation of certain goods. Legal permission for specific imports.

Unification of economic policies between different states. Coordination of trade and economic policies.

Government revenue increases. Tariff collections increase public funds.

Tariff is a tax; subsidy is a government payment. One restricts imports, other supports exports.

A group of countries with common tariffs on non-members. Unified external trade policy among members.

Embargo. Complete prohibition of trade relations.

To prevent foreign firms from selling below cost. Counter unfair pricing practices.

World Trade Organization (WTO). International arbitrator for trade conflicts.

Increased production and competitiveness. Lower costs boost domestic market position.

Quantity of imports decreases. Higher prices reduce import demand.

Protection for new industries to help them grow. Temporary protection until industry matures.

A regional group of countries with a formal trade agreement. Economic partnership with preferential terms.

Protect domestic employment. Preserve jobs from foreign competition.

Trade restrictions other than tariffs, like quotas. Regulatory barriers beyond tariffs.

Exports exceed imports. Positive net exports indicate competitive economy.

Economic policy of restraining trade to protect domestic industries. Uses barriers to shield domestic markets.

Quota. Limits physical amount, not price.