Carefully Define the Following Terms and Explain Their Importance to the Study

question 185

Essay

Carefully define the following terms and explain their importance to the study of economics.
a.
specialization
b.
absolute advantage
c.
comparative advantage
d.
quota
e.
trade adjustment assistance

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Definitions:

Equilibrium GDP

Equilibrium GDP is the level of real GDP where aggregate demand equals aggregate supply, indicating a state of economic balance without excess demand or supply.

Inflationary Gap

The difference between the actual output of an economy and the maximum potential output it could achieve with full employment of resources, leading to inflation.

Federal Debt

is the total amount of money that the government of the United States owes to creditors both domestic and foreign.

Government Budget Deficits

The situation where a government's expenditures exceed its revenues, leading to borrowing and increased debt.