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Econ 4.3
Monday, April 26, 1999
Announcements:
Lecture notes:
Magnitude of Trading
- As the currency of other countries goes
down, US trading goes down
Gains from International Trade
- Why Nations Trade?
- Resources are distributed unevenly
among nations
- Given climates, labor skills and
other resources end amount of production of some
goods is relatively efficient, inefficient to
others
- With specializatoin, total output
of all goods and services may be greater
Two Major Trade Ideas
- Countries usually benefit from free trade
with each other
- Usually, agreements calling for protection
from foreign competition represent special interests
which often work against the general interest -- or are
short sighted
US on Volume basis, is world's largest
trading nation
- US balance of trade = US exports - US
imports
- US balance of trade > 0, net exporter
- US balance of trade < 0, net importer
Trade Goods and Services, US
- Goods -- about 2/3 of US international
trade
- Net Exporter of grains, chemicals,
aircraft
- Net importer of machinery, fuels
| Services |
Exports |
Imports |
| Transportation from US residents to fly
abroad |
|
X |
| French buy US tickets |
X |
|
| Meals, hotels, in other countries |
|
X |
| Meals, hotels bought by foreigners in US |
X |
Goods US Wouldn't have Without
Importing
- Bananas
- Cocoa, spices
- coffee, tea
- raw silk
- nickel, tin
- natural rubber
- diamonds
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