International Trade, Chapter 26.1 Essential Idea: 1. Does any country produce EVERYTHING it needs? ________ 2. _____________- a good that is sold to another country a. In 2005, about ____ percent of all goods in the United States were _____________. b. What is an example of an exported good? 3. ______________- a good that is purchased from another country. a. What is an example of an imported good? 4. Trade is one way that nations help solve the problem of ______________. a. We also trade within our own country. This is why people in _______________ can eat ______________. 5. Why else do we trade? Some countries can make goods at a ________ cost than others. a. This is called _________________________. i. For example, _____________ can make textiles cheaper than the United States, so we buy textiles from _____________ rather than make them ________________. 6. Because of comparative advantage, countries can ___________________ in what products they make. 7. Factors of production a. The factors of production impact comparative advantage. b. _________________ i. Saudi Arabia has a comparative advantage with ______ and the United States has a comparative advantage with ____________. c. ________________ and _________________ i. The United States has a comparative advantage because we have a lot of __________________ and ___________________. We also _________ more than people in many other countries. 8. International trade also provides ___________. a. Instead of making cars for just ____________________, workers can make cars for _____________________ as well. Trade Restrictions 1. Who loses business when we import goods from other countries? __________________. 2. ____________ and ______________ are used to protect our own industries. 3. _____________ are taxes placed on imported goods. This keeps _______________ prices and ______________ prices competitive. 4. ____________________ limit how much of a product can be imported. This way, more people will buy _________________-made products. Free Trade 5. Most policymakers think that the __________ of trade barriers outweigh the ____________. Many countries, therefore, aim to achieve _________________. 6. Countries use __________________________ to achieve free trade. 7. _______________________ a. An organization of independent _______________ nations. b. Today, members of the European Union are even closer because they share a common _____________, known as the ________. 8. ____________________________ a. In the 1990s, ______________________, ___________________, and __________________ signed the ___________________________________________________. (___________) b. Is NAFTA a good or bad thing? i. Why bad? ii. Why good? c. ____________________ i. The ________ is an _______________________ organization that regulates _________ between countries. Balancing Trade 1. If the value of a country’s _________________ decreases, it increases ___________, because they can make goods cheaper than other countries. 2. The balance of trade is the difference between the values of a country’s _________ and _____________. 3. If you ________________ more than you _______________, you have a ____________________. 4. If you ________________ more than you _______________, you have a ____________________. 5. Does the United States have a trade surplus or deficit? __________________