International Trade and Finance

Comparative Advantage: Comparative advantage is when a country can produce a good or service at a lower opportunity cost compared to other countries. It drives specialization and enhances efficiency in international trade.

Tariffs: Tariffs are taxes imposed on imported goods by governments. They aim to protect domestic industries by making foreign products more expensive for consumers.

Exchange Rates: Exchange rates determine the value of one currency relative to another. They play a crucial role in international trade as they affect export competitiveness and import costs.