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Related Flashcards
Cards In This Set
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Absolute gains
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An important element of economic liberalism, absolute gains is the idea that economic interactions creates only winners, even if some gain more than others. Contrasts with relative gains.
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Convertible currency
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A currency that can be exchanged at market price for the currency of another country.
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Globalization
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The ongoing process of international economic and technological integration, made possible by advances in transportation and communication.
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Invisible hand
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A term coined by Adam Smith to describe the uncoordinated behavior of individuals and firms acting in their own selfish interest in the marketplace.
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Law of comparative advantage
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The idea, discussed in detail in Chapter 8, that as long as twocountries are specializing efficiently, each can gain from trade with the other.
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Relative gains
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An important element of economic nationalism, relative gains is the idea that some gain more than others in economic interactions, and those who gain less lose out, even if they have positive absolute gains.
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Sensitivity
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A state is sensitive to another state’s actions if those actions can temporarily hamper a state until it finds a replacement for the good or service from another location.
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Vulnerability
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A state is vulnerable to another state’s actions if it is unable to compensate effectively for losses caused by the other state’s actions.
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