Note taking guide

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Page 1 of 6 Unit 5: International Economics ______________________The study of how economics in other countries and regions of the world affect one another.  Int. Trade o ___________________________________________________________________ ___________________________________________________________________  Imports o ___________________________________________________________________ __________________________________________________________________  Exports o ________________________________________________________________ ________________________________________________________________ __    Create a list of Countries and their Market Advantage…..

SSEIN1: The Student will explain why individuals, businesses, and governments trade goods and services.

SSEIN1:a_Define and distinguish the between absolute advantages and comparative advantages. Absolute Advantage o o Market Advantage: o _____________________________________________________________ _____________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________  Comparative Advantage: o ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________  Opportunity Cost: o ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ___  Absolute Advantage Chart (Will be on a slide): o Which country has the absolute advantage?  ___________________________________________________________ _  Comparative Advantage:  ____________________________________________________________________ ____________________________________________________________________

Page 2 of 6 SSEIN1:_bExplain that most trade takes place because of comparative advantage in the production of a good or service   ____________________________________________________________________ ____________________________________________________________________ SSEIN1:_c Explain the difference between balance of trade and balance of payment Balance of Trade o ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ___  More explanation: o ________________________________________________________________ ________________________________________________________________ ______________________ 

Balance of Trade

o

________________________________________________________________ ________________________________________________________________ __

o 

Favorable Balance of Trade

____________________________________________________________________ ___________________________________________________________________ o o  ___________________________________________________________________ Balance of Payments 

Unfavorable balance of trade

____________________________________________________________________ ____________________________________________________________________ o Assume America buys $4 million worth of shoes from France? How are the balance of trade and balance of payments affected? o ____________________________________________________________________ ____________________________________________________________________ why? ____________________________________________________________________

SSEIN2: The student will explain why countries sometimes erect trade barriers and sometimes advocate free trade.

SSEIN2:a_Define trade barriers as tariffs, quotas, embargoes, standards, and subsidies. o  Trade Barriers ____________________________________________________________________ ___________________________________________________________________.  Tariffs

Page 3 of 6 o o ________________________________________________________________ ________________________________________________________________ __ ________________________________________________________________ _  Tariffs ____________________________________________________ ___________________________________________________________ ___________________________________________________________ __  What do you think the tariff is on goods from China?________  o Quotas: ____________________________________________________________________ ____________________________________________________________________ 

Example________________________________________________________ _______________________________________________________________

 Why do Business owners lobby for quotas? ___________________________ ____________________________________________________________________  What are some examples?________________________________________  Embargoes o o ___________________________________________________________________ ___________________________________________________________________ o Examples:  ___________________________________________________________________. _______________________________________________  1979: ____________________________________________________________________ ____________________________________________________________________ Questions:  Why is an embargo used in situations where countries have severe political differences?______________________________________________ o  What can Embargoes create?___________________________________________ What did America create in Russia when it stopped shipping grain to America?____________________________________________________________   Subsides ____________________________________________________________________ ____________________________________________________________________  Involve ________________________________, often ____________________ or _____________________________, to ______________________________. (Protecting Domestic firms)  DRAW BACK to Subsides………………_________________________________________!

 Page 4 of 6  _____________, Subsides are…. o Example: “_______________________________________________________________.”   ____________________________________________________________________ ____________________________________________________________________ Standards o _______________________________________________________________ ______________________________________________________________ In the following way: ____________________________________________________________________ ___________________________________________________________________. ____________________________________________________________________ ____________________________________________________________________ SSEIN2:b_Identify costs and benefits of trade barriers over time.  Benefits to trade Barriers o ______________________________________________________________ o ______________________________________________________________ o o ______________________________________________________________ _______________________________________________________________ ______________________________________________________________.  Costs to Trade Barriers o ________________________________________________________________ ________________________________________________________________ __ o ________________________________________________ o “_______________________________________________________________ ________________________________________________________________ _” SSEIN2:c_List specific examples of trade barriers. Refer to the items in quotes. SSEIN2:d_List Specific example of trading blocs such as EU, NATA, AND ASEAN.  EU: European Union o ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________  ASEAN: Association of Southeast Asian Nations o ___________________________________________________________________ ___________________________________________________________________ =__________________________________________________________________ ____________________________________.  NAFTA: North American Free Trade Agreement (NAFTA)

Page 5 of 6 o ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________   o ___________________________________________________________________ ___________________________________________________________________ __________________________________________________________________. SSEIN2:e_Evaluate arguments for and against free trade. FREE TRADE: ____________________________________________________________________  ____________________________________________________________________ ___________________________________________________________________.

SSEIN3 The student will explain how changes in exchange rates can have an impact on the purchasing power of individuals in the U.S. and in other countries.

SSEIN3:a_Define exchange rates as the prices of one nation’s currency in terms of another nation’s currency. o Exchange Rates o ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ __.  Fixed Exchange Rate o _______________________________________________________________ _______________________________________________________________ _______________________________________________________________  Floating Exchange Rate o ________________________________________________________________ _ SSEIN3:b_Locate information on exchange charts SSEIN3:C Interpret exchange rate tables.  o o $1=.___________YEN $1,000= .03 YEN X 1,000 = ________YEN o o SSEIN3:d_Explain why, when exchange rates change that some groups benefit and other lose. Appreciation and Depreciation o ________________________________________________________________ _ ________________________________________________________________ _

Page 6 of 6 o ________________________________________________________________ _  o Strong, Appreciate Dollar o ________________________________________________________________ _ o ________________________________________________________________ _ o o Weak or depreciated dollar: o ________________________________________________________________ _ o ________________________________________________________________ _ o o ________________________________________________________________ _ ________________________________________________________________ _ ________________________________________________________________ _ ________________________________________________________________ _ o ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ___  Depreciation o Who benefits when a currency Depreciates? o Hint:__________________________________________________________ _______________________________________________________________ __________ Why? _______________________________________________________________

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