Archives: Terms

Definition of Trade Not Aid “Trade Not Aid” is an economic philosophy and policy approach that advocates for promoting sustainable development in developing countries through international trade rather than providing them with foreign aid. The underlying principle suggests that by integrating developing nations into the global economy and establishing equitable […]

Definition of Trade Gap The trade gap, also known as the trade deficit or trade imbalance, occurs when a country’s imports of goods and services exceed its exports. It signifies a situation where the monetary value of what a nation purchases from overseas is greater than what it sells abroad. […]

Definition of Trade Diversion Trade diversion is an economic concept that occurs when trade policies such as tariffs or trade agreements cause a country’s imports to shift from a more efficient producer to a less efficient one. This often happens in the context of regional trade agreements, where member countries […]

Definition of Trade Cycle The trade cycle, also known as the business cycle or economic cycle, refers to the fluctuations in economic activity that an economy experiences over a period of time. These cycles consist of periods of expansion, where economic activity rises, and periods of contraction or recession, where […]

Definition of Trade Credit Trade credit is a business-to-business (B2B) agreement in which a buyer can purchase goods or services and pay the supplier at a later date. Essentially, it is a form of short-term financing extended by suppliers to their customers. This arrangement helps businesses manage their cash flow […]

Definition of Trade Creation Trade creation refers to the economic concept where trade policies, typically through the formation of trade agreements or unions, lead to the replacement of more expensive domestic production with cheaper imports from member countries. This creates efficiency and enhances the allocation of resources by allowing participating […]

Definition of Trade Bill A trade bill, also known as a commercial bill or bill of exchange, is a financial instrument used in international trade to facilitate the payment for goods and services. It is essentially an agreement that promises payment at a future date or upon the occurrence of […]

Definition of Trade Barriers Trade barriers refer to government-imposed regulations, policies, and restrictions that limit international trade between countries. These barriers are typically established to protect domestic industries and jobs from foreign competition, control the amount of foreign goods entering the country, safeguard national security, or retaliate against other trading […]

Definition of Trade Association A trade association, also known as an industry trade group, business association, or sector association, is an organization founded and funded by businesses that operate in a specific industry. The main purpose of a trade association is to promote the interests of its member companies through […]

Definition of Tradables Tradables refer to goods and services that can be sold in international markets. Essentially, they are items that are not confined to domestic consumption but are traded across borders. This category of goods and services is fundamental to international trade theories and practices. Their tradability influences global […]