ECS1601 4-6
Study online at https://quizlet.com/_gtcdjt
1. why countries One of the basic reasons for international trade is the fact that factors of production
trade (natural resources, labour, capital and entrepreneurship) are not evenly distributed
among the nations of the world.
The other factors of production are also important japan uses skilled labour limited
resources
2. Absolute advan- Between two countries who can make the most products
tage global trade
3. Comparative ( or Which country can produce most at lesser cost
relative) advan-
tage
4. Trade policys -Import Tarrifs
-Import Quotas
-Subsidies
-Non-Tarrif barriers
-Exchange controls
-Exchange rate policy
5. Foreign Ex-
change market
6. Equilibrium ex- The equilibrium exchange rate is the rate at which the quantity of dollars demand-
change rate ed equals the quantity of dollars supplied.
7. A decrease in the
supply of dollars
1/5
, ECS1601 4-6
Study online at https://quizlet.com/_gtcdjt
8. The speculative Foreign currency is a homogeneous, durable good and currency markets are
nature of the subject to speculative activity. We now use the rand-dollar market to explain the
foreign exchange basic elements and impact of speculation in a foreign exchange (or currency)
market market.
9. managed float- The central bank monitors developments in the foreign exchange market and
ing decides whether or not to intervene. If it decides to intervene, it can also do so
on a limited scale. For instance, in our example the SARB may supply fewer than
a billion dollars. In such a case the exchange rate will settle somewhere between
R14 and R15 per dollar, depending on the amount of intervention.
10. (GDP) The gross domestic product is the total value of all final goods and services
produced within the boundaries of a country in a particular period (usually one
year).
11. One of the ma- double counting.
jor problems that
national accoun- • A farmer produces 1000 bags of wheat which he sells to a miller at R1 O per bag,
tants have to deal yielding a total of R1 O 000.
with
• The miller processes the wheat into flour, which he then sells to a baker for R12
500.
• After baking bread with the flour, the baker sells it to a shop for R18 000.
12. Nowadays GDP is GVA gross value added
often also called
2/5
Study online at https://quizlet.com/_gtcdjt
1. why countries One of the basic reasons for international trade is the fact that factors of production
trade (natural resources, labour, capital and entrepreneurship) are not evenly distributed
among the nations of the world.
The other factors of production are also important japan uses skilled labour limited
resources
2. Absolute advan- Between two countries who can make the most products
tage global trade
3. Comparative ( or Which country can produce most at lesser cost
relative) advan-
tage
4. Trade policys -Import Tarrifs
-Import Quotas
-Subsidies
-Non-Tarrif barriers
-Exchange controls
-Exchange rate policy
5. Foreign Ex-
change market
6. Equilibrium ex- The equilibrium exchange rate is the rate at which the quantity of dollars demand-
change rate ed equals the quantity of dollars supplied.
7. A decrease in the
supply of dollars
1/5
, ECS1601 4-6
Study online at https://quizlet.com/_gtcdjt
8. The speculative Foreign currency is a homogeneous, durable good and currency markets are
nature of the subject to speculative activity. We now use the rand-dollar market to explain the
foreign exchange basic elements and impact of speculation in a foreign exchange (or currency)
market market.
9. managed float- The central bank monitors developments in the foreign exchange market and
ing decides whether or not to intervene. If it decides to intervene, it can also do so
on a limited scale. For instance, in our example the SARB may supply fewer than
a billion dollars. In such a case the exchange rate will settle somewhere between
R14 and R15 per dollar, depending on the amount of intervention.
10. (GDP) The gross domestic product is the total value of all final goods and services
produced within the boundaries of a country in a particular period (usually one
year).
11. One of the ma- double counting.
jor problems that
national accoun- • A farmer produces 1000 bags of wheat which he sells to a miller at R1 O per bag,
tants have to deal yielding a total of R1 O 000.
with
• The miller processes the wheat into flour, which he then sells to a baker for R12
500.
• After baking bread with the flour, the baker sells it to a shop for R18 000.
12. Nowadays GDP is GVA gross value added
often also called
2/5
