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Warm-up Make a list of 5 products, services, or ideas you believe we import. Make a list of 5 products, services, or ideas that you believe we export Why are some nations wealthy and others not?
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Unit VII – The global Economy International Trade, International Economic Development
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International Trade Export – Goods sold to another country Import – Goods bought from another country –
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Exports by nation
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Advantages of International Trade Obtaining scarce goods – nations trade for goods that they can otherwise not get on their own EX – diamonds in the US, commercial aircraft to the rest of the world Comparative advantage – ability of one country to produce a good more efficiently than another. Japan makes TV’s better than the US does, so we get our TV’s from them
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Advantages of International Trade Creating jobs – by exporting products, producers expand market and thus can hire more workers
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Supporting domestic industries Tariffs – tax on imports to make them more expensive to buy than domestic goods Some foreign luxury cars are more expensive than domestic luxury cars Quotas – limit on the amount of foreign goods imported Reagan put a limit on Japanese cars in the 1980’s to save American autoworkers
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Free Trade Zones Area where goods may be handled and manufactured without the intervention of customs Sea ports, international airports,
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Free Trade Agreements WTO – oversees and organizes trade rules, settles trade disputes, and helps developing countries Criticism Favors major corporations instead of workers, environment, and poor countries
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International Trade as a political Weapon Embargos – nation’s agree to block trade with a target nation WWII, embargo against Germany, Japan by USA.
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International Trade as a political Weapon Trade Agreements – reduce or eliminate restrictions between nations to promote free trade
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Trade Balance of trade – difference between value of exports and imports Trade surplus – exports > imports = making money Trade deficit – exports < imports = losing money
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Negatives of a trade deficit Lower GDP Higher national debt Higher unemployment Lower savings rates
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Globalization
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Warmup 5/18 What do you think the term globalization means?
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Free Trade Agreements NAFTA – USA, Mexico, Canada – eliminated barriers to trade between the countries EU – goods, services, and people can move freely between these countries; uses euro as currency
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Free Trade Agreements IMF – allows countries to donate to money pool and then borrow when they need to meet payments CAFTA – USA, Costa Rica, El Salvador, Guatemala, Honduras, Nicuragua, Dominican Republic SEATO – Australia, France, New Zealand, Pakistan, Philippines, Thailand, UK, USA (no longer in effect) World Bank – provides loans to developing countries
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What has the increase in international trade created among nations of the world? Income inequality
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Concerns over international trade Environmental – difficult to monitor multinational (MNC) businesses b/c of varying environmental regulations Worker exploitation – MNC’s use nations with cheap labor to increase profit margin’s at expense of worker safety and health.
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Internationalism Nations should cooperate to promote common aims
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United Nations (UN) Environmental – Leaders signed treaties to safeguard animal and plant life and limit global pollution Income inequality – called on businesses to promote economic development in the countries they operate in.
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United Nations (UN) Human Rights – basic freedoms that all people should enjoy Universal Declaration of Human Rights – basic rights that all people should have (movement, seek asylum, nationality, property, have a family, etc) International Tribunals – courts that hear and make judgments on violations of human rights
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Nations to choose from Singapore Japan Nigeria Russia Argentina
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Closing Questions – Why are some nation’s wealthy? Answer in a few sentences each question on the same sheet of paper as your warm-up and turn in before class ends. How important are natural resources to a nation’s wealth? What are the major factors that encourage long-term economic growth? How does per capita GDP relate to the quality of life? Why is this important? What do we mean by investment in human capital?
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ExpressPoll 5/18/2012 11:10:58 AM
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