Use the decisive difference to choose the correct explanation. The final column links to the full discussion.
| Concepts | Decisive difference | Why it matters | Read more |
|---|---|---|---|
| Depreciation / devaluation | Market-driven fall under floating rates / official reduction in a fixed rate. | Name the exchange-rate regime before explaining the cause. | p. 35 |
| Terms of trade / trade balance | Export prices relative to import prices / export value minus import value. | Better relative prices do not guarantee an improved balance. | p. 14 |
| Trade creation / trade diversion | Cheaper member imports replace domestic output / dearer member imports replace cheaper outsiders. | Compare resource costs, not just growth in intra-bloc trade. | p. 19 |
| Absolute / relative poverty | Failure to meet basic needs / low income relative to a society’s benchmark. | Growth may reduce one without reducing the other. | p. 45 |
| Fiscal deficit / public debt | Annual spending–revenue shortfall / outstanding borrowing stock. | Compare both with repayment capacity and nominal GDP. | p. 60 |