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Unit 5: International Economics
______________________The study of how economics in other countries and regions of the world affect one another.
 Int. Trade o ___________________________________________________________________
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 Imports o ___________________________________________________________________
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 Exports o ________________________________________________________________
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 Market Advantage: 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 ____________________________________________________________________
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 Comparative Advantage: o ____________________________________________________________________
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 Opportunity Cost: o ________________________________________________________________
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 Absolute Advantage Chart (Will be on a slide): o Which country has the absolute advantage?
 ___________________________________________________________
_
 Comparative Advantage:
 ____________________________________________________________________
____________________________________________________________________

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SSEIN1:_bExplain that most trade takes place because of comparative advantage in the production of a good or service
 ____________________________________________________________________
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SSEIN1:_c Explain the difference between balance of trade and balance of payment
 Balance of Trade o ________________________________________________________________
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 More explanation: o ________________________________________________________________
________________________________________________________________
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 Balance of Trade o ________________________________________________________________
________________________________________________________________
__ o Favorable Balance of Trade
 ____________________________________________________________________
___________________________________________________________________ o Unfavorable balance of trade
 ___________________________________________________________________ o Balance of Payments
 ____________________________________________________________________
____________________________________________________________________ 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

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________________________________________________________________
__ o ________________________________________________________________
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 Tariffs
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 What do you think the tariff is on goods from
China?________
 Quotas: o ____________________________________________________________________
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 Example________________________________________________________
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 Why do Business owners lobby for quotas? ___________________________
____________________________________________________________________
 What are some examples?________________________________________
 Embargoes o ___________________________________________________________________ o ___________________________________________________________________ o ___________________________________________________________________.
Examples:
 _______________________________________________
 1979:
____________________________________________________________________
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Questions:
 Why is an embargo used in situations where countries have severe political differences?______________________________________________
 What can Embargoes create?___________________________________________ o 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………………_________________________________________!

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 _____________, 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 ___________________________________________________________________
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 ASEAN: Association of Southeast Asian Nations o ___________________________________________________________________
___________________________________________________________________
=__________________________________________________________________
____________________________________.
 NAFTA: North American Free Trade Agreement (NAFTA)

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___________________________________________________________________ o ___________________________________________________________________
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 FREE TRADE:
SSEIN2:e_Evaluate arguments for and against 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 ________________________________________________________________
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 Fixed Exchange Rate o _______________________________________________________________
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 Floating Exchange Rate o ________________________________________________________________
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SSEIN3:b_Locate information on exchange charts
SSEIN3:C Interpret exchange rate tables. o $1=.___________YEN o $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 ________________________________________________________________
_
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________________________________________________________________
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 Strong, Appreciate Dollar o ________________________________________________________________
_ o ________________________________________________________________
_ o ________________________________________________________________
_ o ________________________________________________________________
_ o Weak or depreciated dollar: o ________________________________________________________________
_ o ________________________________________________________________
_ o ________________________________________________________________
_ o ________________________________________________________________
_ o ________________________________________________________________
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 Depreciation o Who benefits when a currency Depreciates? o Hint:__________________________________________________________
_______________________________________________________________
__________ o Why? _______________________________________________________________