2 Voluntary Trade Factors involved in Voluntary Trade Specialization Trade BarriersCurrency ExchangeControl of Supply
3 SpecializationDefine: -specialization: The products a country makes best and are demand in the world market. -interdependence: A relationship between countries in which they rely on one another for resources, goods, or services.
5 SpecializationEQ: How does specialization encourage trade between countries? If a country produces the goods they can make most efficiently, that country can trade them for goods made by others that cannot be produced locally.
6 Trade BarriersDefinition: The prevention of free trade
7 Trade BarriersPhysical Trade Barriers: (give 2 examples) -mountains -deserts -lack of rivers, bodies of water
8 Trade BarriersPolitical Trade Barriers: -tariff A tax placed on goods when they are brought (imported) into one country from another country. -quota A limit to the number of amount of a foreign-produced goods that is allowed into a country. -embargo A formal halt to trade with a particular country for economic or political reasons.
9 System for Exchanging Currency Define: -currency: Paper or coins that a country uses for its money supply. -international trade: Countries trading with each other to obtain resources, goods, and services. -exchange rate: A system of changing one type of currency to another.
10 System for Exchanging Currency Why does international trade require a system for exchanging currency between countries? So that it is possible to buy and sell goods between nations with different types of money.
11 OPECOrganization of Petroleum Exporting Countries
12 OPECDefine -supply: The amount of a good or service available for sale in a market. -demand: The amount of a good or service wanted in a market.
13 OPECWhat is the primary function of OPEC? To control the supply and price of oil.
14 OPECGive some examples of what petroleum (oil) is used for: cars lawn mowers machinery to make plastic products
15 Economic Growth 4 Factors that influence Economic Growth Labor Capital GoodsLand(resources)Entrepreneurship
16 Relationship between human capital and GDP Define:-GDP:Gross Domestic ProductThe value of all goods and services produced within a country in a given year and converted into US dollars for comparison.
17 Relationship between human capital and GDP -human capital The knowledge and skills that make it possible for workers to earn a living producing goods or services.
18 Relationship between human capital and GDP Companies that invest in human capital are more_____________________. Countries that invest in human capital have ______________________GDP’s because_______________________profitablehigherthey invest in educating andtraining their citizens.
19 Relationship between human capital and GDP Think- Pair-Share Example:
20 Relationship between capital goods and GDP Define:-capital goodsThe factories, machines, and technology that people use to make products to sell.3 examples of capital goods:- oil producing technology- communications equipmentassembly line machinery
21 Relationship between capital goods and GDP Companies that invest in capital goods are more__________. Countries that invest in capital goods have _________________ GDP’s because_________________________profitablehigherthey can produce more goods in a quicker and efficient way.
22 Relationship between capital goods and GDP Think-Pair-Share Example:
23 The Role of Oil in SW Asia Economy Another name for oil is_____________.petroleum
24 The Role of Oil in SW Asia Economy Countries WITH oil in SW Asia tend to have: Countries WITHOUT oil (except Israel) tend to have:Higher GDPHigher standard of livingLower GDPLower standard of living
25 The Role of Oil in SW Asia Economy Israel has very little _____. However, Israel has a ____________________ because they invested in ________ and ___________ goods for ___________ and _______________ industries.oilhigh GDPhumancapitaltechnologycommunication
26 EntrepreneurshipDefine: -entrepreneur Creative, original thinkers who are willing to take risks to create new businesses and products.
27 Entrepreneurship risk An entrepreneur is willing to take a_____ in order to make a________________.profit