International Economics What that Image Definition means A producer can Same input, produce a output Absolute more output by using fewer inputs advantage than any competing more stuff producer produced Less input, A producer can same output produce one product Comparative with a smaller amount Same amount advantage of inputs than the of stuff competition produced for a cheaper price System under which the value of Rate that does currencies were fixed NOT change in relation to one rate based on supply another & demand (China) The exchange rate system in effect until 1971 System that relies on supply & demand to determine the Rate that value of one changes Floating rate currency in terms on supply & of another demand Exchange rate system in effect 1971 Tax on an imported product Protects designed to protect Protective tariff domestic less efficient businesses domestic producers Tax placed on designed to Revenue tariff imported goods to increase all raise revenue revenue &bring more money in
International Economics Image Definition What that means Absolute advantage A producer can produce a output by using fewer inputs than any competing producer Same input, more output more stuff produced Comparative advantage A producer can produce one product with a smaller amount of inputs than the competition Less input, same output Same amount of stuff produced for a cheaper price rate System under which the value of currencies were fixed in relation to one another The exchange rate system in effect until 1971 Rate that does NOT change based on supply & demand (China) Floating rate System that relies on supply & demand to determine the value of one currency in terms of another Exchange rate system in effect 1971 Rate that changes on supply & demand Protective tariff Tax on an imported product designed to protect less efficient domestic producers Protects domestic businesses Revenue tariff Tax placed on imported goods to raise revenue designed to increase all revenue &bring more money in
econ_key_terms.docx