Download presentation
Presentation is loading. Please wait.
Published byDinah Cannon Modified over 9 years ago
1
Macro Chapter 5 Presentation 1 Trade surplus, trade deficit, GDP, Absolute/Comparative advantage
2
United States and World Trade Volume and Pattern Principal U.S. Exports & Imports – 2005 in Billions of Dollars Chemicals Consumer Durables Agricultural Products Semiconductors Computers Generating Equipment Automobiles Aircraft Medical Telecommunications Petroleum Automobiles Household Appliances Computers Metals Clothing Consumer Electronics Generating Equipment Semiconductors Telecommunications ExportsImports Source: Department of Commerce Data $68.6 53.5 52.9 47.2 45.5 33.2 30.4 29.1 27.6 25.6 $251.6 123.7 97.1 93.3 83.8 79.1 47.3 43.1 37.1 25.8
3
Gross Domestic Product (GDP) The total market value of all final goods and services produced in a given year
4
Trade Deficit Occurs when imports exceed exports **US has a trade deficit in goods The US had a $497.9 billion trade deficit in 2010… $1.8 trillion in exports minus $2.3 trillion in imports.
5
Trade Surplus Occurs when exports exceed imports ***US has a trade surplus in services such as transportation, legal, medical and financial services Trade surplus in services of $526 B in 2010
6
US Trade Balance
7
Trade Data **numerically, Canada is the biggest trading partner (16% of total trade) US has the biggest trade deficits to China and Mexico… trade surplus with Australia
8
Tariffs An excise tax on an imported product Used to encourage the purchase of domestic goods
9
Multinational Corporations Firms that have sizable production and distribution activities in other countries Ex- Coca-Cola (Atlanta), Nestle (Switzerland)
10
Specialization and Trade Specialization and international trade increase the productivity of a nation’s resources and allow for greater total output
11
Adam Smith Quote “It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy.”
12
Absolute Advantage The ability of one person, company or country to produce more of a good or service than others using the same amount of resources
13
Comparative Advantage A lower opportunity cost than that of your competitor Give up less than the competition to produce a good
14
Comparative Advantage Output Problems The following are the amount of cars and bikes Mike and Mary can produce in 1 day # of cars# of Bikes Mike 4 6 Mary 2 8
15
Comparative Advantage Input Problems The table below indicates the number of labor hours required in Country X and Y to produce one unit of food or one unit of clothing. CountryFoodClothing X30 hours40 hours Y10 hours20 hours
Similar presentations
© 2025 SlidePlayer.com Inc.
All rights reserved.