Presentation on theme: "Supply and Demand Analysis of Exports and Imports"— Presentation transcript:
1 Supply and Demand Analysis of Exports and Imports Advanced Placement MacroeconomicsYorktown High SchoolE.W. Breighton UnderhillAll Rights Reserved
2 What are the determinants for the relationship between (X-M) ? World PriceThe interaction of world supply and demand determines world equilibrium price level.Domestic PriceThe interaction of domestic supply and demand determine the domestic equilibrium price level.
4 What happens in the absence of trade… To domestic prices?To foreign prices?International trade will provide countries the opportunity to import or export goods and services.
5 Graphing TipsGraph the two countries individual domestic S & D side by side.Use the Eq point as the beginning of the Export and Import Demand Graph.You end at the max Qs and the max Qd as derived from the S & D graphYou plot your XM Graph from the Eq on the Y axis
6 Case Study for Aluminum Reference TextbookChapter 35McConnell, p