International Economics

exchange rate
2

Exchange Rate

The exchange rate of a currency is the price a currency expressed in terms of another currency. Ex: $1 is worth €0.82 (07/15/12). The foreign exchange market is a market where currencies are exchanged for other currencies. In this market, all buyers are also sellers since they are buying in one currency and selling another. Types...
Trade Barriers
1

Trade Barriers

There are four types of trade barriers that can be implemented by countries. They are Voluntary Export Restraints, Regulatory Barriers, Anti-Dumping Duties and Subsidies. We covered Tariffs and Quotas in our previous in great detail. Types of Trade Barriers 1. Voluntary Export Restraints (VERs) They are agreements between an exporting and an importing country that limits the quantity...
quotas
0

Quotas

A quota, a type of trade barrier, is a restriction on the quantity that can imported into a country. Quotas and Tariffs are effectively the same except that governments collect revenue from tariffs, while exporting firms can collect extra revenue from quotas (box 3). This increases the firm's export revenues. Effects of Quotas 1. Domestic Employment...
global labor arbitrage
0

Global Labor Arbitrage

Global labor arbitrage is where, as a result of the removal or reduction of barriers to international trade, jobs move to nations where labor and the cost of doing business (such as environmental regulations) is inexpensive and/or impoverished labor moves to nations with higher paying jobs. Two common barriers to international trade are tariffs (politically imposed)...
Tariffs
2

Tariffs

A tariff is a type of trade barrier that acts a tax on imports. The tariff maybe in the form of a specific or ad valorem tax. Tariffs raise the price of the imported good to lowers its consumption. This encourages consumers to pick the local option. A specific tax is imposed on each unit, i.e. $0.50 on...
trade finance
1

Trade Finance

Banks involved in commercial lending provide a wide range of financing packages for international trade, commonly called trade finance. Trade finance not only assists the buyer in financing its purchase but also provides immediate cash to the seller for the sale. This is profitable for the lending institution. This mechanism is an important financing or credit...

© 2017 Intelligent Economist. All rights reserved.