GGR365H5 Midterm: Midterm Questions.docx
Document Summary
Globalization: the growth in international exchange of goods, services, and capital, and the increasing levels of integration that characterize economic activity. Economic activity that is fuel and furnace of cross-border integration. Capital flows: measurement of an increase or decrease in a nation"s domestic or foreign assets. Migration patterns: impact of labour market fluidity on production costs through the loss (emigration) or gain (immigration) of potential workers, especially those with particular skills. Trade agreements: bilateral, regional or multilateral economic arrangements designed to reduce or eliminate trade barriers. Unilateral tariff reduction reductions made independently and without reciprocal action by other countries (country can reap the benefits of free trade immediately) Multilateral reducing trade barriers in concert with other countries. Absolute advantage ~ (or increasing returns to scale argument ) Each trading partner is better than another at something . Therefore, we specialize in what we do best.
