Globalization EQ: How does globalization encourage economic interdependence?

Comparative Advantage Which country can make a good cheaper. Which country can make a good cheaper. In the following example, who has the comparative advantage? In the following example, who has the comparative advantage?

Comparative Advantage  Minimum Wage –United States $7.25 –China $2.00  Regulations on Producers –United States EPA, OSHA, many more –China Few if any  Corporate Taxes –United States 35-39% –China 25%  Small Business Taxes –United States 15-34% –China 20%

Favorable v. Unfavorable Balance of Trade  Imports v. Exports  United States Balance of Trade  ImportsExports –China 296,402 65,576 –France 34,034 26,522 –Japan 95,94951,179 –Mexico 176, ,997 –EU 281,319220,776

Protective Tariffs  Based on what we have learned about Comparative Advantages and prices other countries can charge while still making a profit, why does the U.S. Government have to place Protective Tariffs on imports?

Exchange Rate  What the U.S. Dollar is worth compared to currency of other countries.  $1 = –Chinese Yuan $6.82 –Mexican Peso $12.32 –Euro $0.75 –Canadian Dollar $1.00 –Japanese Yen $91.99 –British Pound $0.66  What do these exchange rates mean for American tourists to these countries or American companies who sell goods to these countries?

Price Comparison  Price Comparison Price Comparison Price Comparison

Types of Countries  Developed  Developing  Undeveloped

World Map

International Organizations  EU  NAFTA  WTO  IMF  World Bank  For each one, determine what it stands for and tell what it does and why it was formed.