7.5 Analyze the economic indicators of the business cycle 7.6 Analyze the costs and benefits of global trade

Warmup Draw a map of the world to the best of your ability. Name as many countries as you can.

Unemployment and Poverty Civilian labor force- civilians 16 or older working or looking for work Full Employment- unemployment rate 4-6% Underemployment- people working at a job in which they are overqualified or part-time

Poverty rate- percentage of people who live in households below the poverty threshold-income not sufficient to support household(One person: $11,344, Two adults w/two children: $22,133)

Slicing the apple Q’s -List out all of the countries that you see that manufacture parts for an iPhone. -A company called Foxconn manufactures the iPhones, how much profit do they pull in? -How much money does Apple make on each iPhone? -How is apple able to charge so much for iPhones? -Who benefits the most: the contributing component manufacturers, the consumers, Foxconn, or Apple?

International Economics

I. Why nations Trade Comparative advantage Nations specialize on the goods that they produce the best, trade to get other goods

Global interdependence In our globalized economy, every nation is dependent on the rest helps increase production among all

II. Balance of Trade Balance of Trade- relationship b/w a nation’s imports and exports that effects its currency Trade Surplus- more exports than imports, leads to a strong currency

Trade deficit- more imports than exports, leads to a weak currency

World Map Locations United States China Russia Ukraine India Malaysia South Korea Germany Italy Japan Afghanistan Brazil Cambodia Colombia Mexico Canada France England Spain North Carolina Iran Pakistan

III. Trade Barriers quota- strict limit on imported goods tariff- tax on imported goods subsidies- US gov’t supporting a US industry

Protectionism- creating trade barriers to foreign trade in order to make a nation’s goods more competitive Protectionism may restrict competition, hurt innovation, and lead to trade wars

IV. Free Trade The goal of free trade agreements are to eliminate trade barriers Advantages- competition, growth among all, int’l specialization

Disadvantages- economic vulnerability, jobs can be outsourced (sent to an external provider) World Trade Organization (WTO)- negotiates new trade agreements and works to expand world trade

European Union (EU)- European nations have eliminated trade barriers and created a common currency North American Free Trade Agreement (NAFTA)- goal to eliminate barriers b/w Mexico, Canada, and US

Review How do nation’s seek to gain a comparative advantage? How can a country respond if its currency depreciates? What are some consequences of protectionism? Name an international trade organization and state what it does.

V. Developing Nations Developing nations are characterized as having low per capita GDP, poor health, infrastructure, etc Free trade has helped more than economic aid in lifting developing nations out of poverty

World Bank- lends to developing nations to reduce poverty International Monetary Fund (IMF)- seeks to stabilize exchange rates and encourage good economic policy