University:
College of the Holy Cross
Course:
ECON 110 | Principles of Economics
Academic year:

2022
Views:

172

Pages:

2
Author:

Zoie Hudson

Trade Protection: the economic policy of restraining trade between states through methods such as tariffs, quotas and other government regulations Tariff: a tax imposed on imported goods and services aimed at restricting their flow into the country and protecting domestic producers Import Quota: a type of trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time Producer Subsidy: an amount of money given to firms by a government in order to encourage production and consumption Administrative Barriers: trade barriers that restrict imports or exports of goods and services through mechanisms other than a tariff Free Trade: international trade left to its natural course without tariffs, quotas, or other restrictions Economies of Scale: the cost advantage that arises with increased output of a product Efficient Allocation of Resources: a state of the economy in which production represents consumer preferences Competition: rivalry in which all producers are trying to achieve what other producers are seeking at the same time Source of Foreign Exchange: areas in which economic and financial transactions between countries affect the exchange rate Tariffs - - - Aimed to increase the domestic production of a good, as well as the domestic price of the good - This in turn causes a decrease in the consumption of the good Tariffs are used to reduce the quantity imported of a particular good or service, therefore protecting domestic producers To show the implementation of a tariff on a diagram, one uses a shift upwards of the horizontal price line Quotas - A quantitative restriction on the volume of imports, used to protect domestic producers within a country - Used to increase domestic production without increasing the overall price level of the good or service Subsidy