Test Bank: International Economic
Topics: Economics, Costs, Economics of production, International trade, Variable cost / Pages: 5 (1106 words) / Published: Feb 9th, 2013

Sovereignity- supreme & independent power or authority in government as possessed or claimed by a state or community. Being sovereign nations can be more indifferent to the interests of others. As long as nations exist, international economics will always need a separate body of analysis distinct from the rest of economies.

Globalization- worldwide integration & development; extending to other or all parts of the world

Euro Benefits * Low interest rates due to a high degree of price stability * More price transparency * Removal of transaction costs * No exchange rate fluctuations
* Lack of strong Federal government * Two speed economies * To raise or lower interest rates * Abolished independent monetary policies
(being able to slash interest rates & devaluing a currency)
Different moneys- the existence of separate national currencies means the price ratio between them can change
Different fiscal policies- in the international area tax differences can set off massive flows of funds and goods that would not have existed without the tax discrepancies

Factor mobility- the importance of this intranatural mobility of the factors of production was that returns to factors tended to equality within countries but not between countries. The degree to which a factor of production, such as labor or capital, is able to move, either among industries or among countries, in response to differences in its factor price, thus tending to eliminate such differences. Mobility & accessibility at a cost there is a price involved

Land- people usually migrate within their own country more readily than they will emigrate abroad. Identity of languages, customs, and traditions within countries exist rather than between countries.

Labor-Personal impediments include physical location, and physical and mental ability. The systemic impediments include educational opportunities as well as various laws and

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