Presentation on theme: "Supply and Demand Analysis of Exports and Imports"— Presentation transcript:
1Supply and Demand Analysis of Exports and Imports Advanced Placement MacroeconomicsYorktown High SchoolE.W. Breighton UnderhillAll Rights Reserved
2What 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.
4What 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.
5Graphing 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
6Case Study for Aluminum Reference TextbookChapter 35McConnell, p