Bellringer
• Objective: Analyze how globalization has
impacted trade.
• Homework:
Answer: Do you think that international trade is
in general a good thing or a bad thing? Why?
• In your groups, find objects in the classroom
and locate what country they are made in.
– Note: You can use clothing, electronics, toys,
notebooks, et cetera—but DO NOT go into anyone
else’s stuff!
– Using your handout, write the item on the
country it derives from.
• You have five minutes in your group. The
group that comes up with the most items
wins!
CURRENT EVENTS AND
INTERNATIONAL TRADE
EQ: How can we explain the impact of current events and
globalization on the international economy
Objective 9.04: Assess how current events impact
decisions made by consumers, producers, and
government policy makers.
Objective 9.05: Explain the impact on the United States
economy of international trade and global products.
Objective 9.06: Investigate the ways that domestic and
international economies are interdependent.
Where do you think these companies are
located?
Switzerland
Japan
Great Britain
United States
Canada
United States
England
The Netherlands
Thailand
GLOBALIZATION: when countries depend on each other
politically and economically
Why do countries trade with one another?
• International trade helps nations get all the goods they need
even though they can only produce a limited amount of
goods.
• International trade affects our…
– Gross Domestic Product (GDP): the goods and services a country
produces in a year
• The US GDP ONLY includes things produced in the United States!
• Determines whether a country is DEVELOPING or DEVELOPED
– Consumer Price Index (CPI): measures the average prices of
goods and services
• How do you think trade affects prices?
• How do countries decide which goods to produce?
– Comparative advantage: when a country can produce a good or
service at a low cost compared to other countries
– Things considered in comparative advantage:
• Climate
• Resources available (land? water?)
• What consumers in that country are likely to buy (ex. Can consumers in
Ethiopia afford to buy cars? Probably not. So Ethiopia shouldn’t make
cars.)
What a Developed Country Looks
Like…
1.High Energy Consumption
2.More service oriented or industrial jobs
3.Low Infant Mortality Rate
What a Less Developed Country Looks
Like (LDC)…
• Low energy consumption
• More agrarian and some industrial
• High Infant Mortality Rate
Does every country benefit equally from
international trade?
Import: a good brought
in from another
country
Examples:
US
Does every country benefit equally from
international trade?
US
Export: a good sent to
another country
Examples:
Does every country benefit equally from
international trade?
• Trade balance: the relationship between a nation’s
imports and its exports
• Trade surplus: nation exports more than it imports
• Trade deficit: nation imports more than it exports
• Favorable balance of trade: a country with a trade surplus
• Unfavorable balance of trade: a country with a trade
deficit
• What sort of balance of trade do you think the US has?
• Are all countries with a favorable balance of trade are
benefitting from international trade?
• Are all countries with an unfavorable balance of trade
being hurt by international trade?
If a country exports $2.5 billion worth of
goods but imports $4.2 billion worth of
goods, what sort of balance would this be?
• Is this favorable?
– Is the country making a profit?
• Or is this unfavorable?
– Is the country at a loss?
Analyze the Chart and Answer
Questions
•
•
•
•
What is this chart comparing?
How much does the U.S. export or sell to China?
How much does the U.S. import or buy from China?
Redefine favorable balance of trade:
China-US Interdependence Explained
• http://www.youtube.com/watch?v=T1dDIrOC
bUo&feature=related
Trade simulation
How does the government limit trade?
• IMPORT QUOTA: a trade barrier that limits the
amount of a good that can be imported
• Ex. US has import quotas on sugar to help
protect American sugar growers and make
sure they’re earning enough $$!
How does the government limit trade?
• EMBARGO: completely stopping trade with a
country – no trade
• Ex. US embargo against Cuba—US refuses to
trade with Cuba until it develops a democratic
government (this is why Cuban cigars are so
expensive and rare!) http://www.youtube.com/watch?v=W50RNAb
my3M
How does the government limit trade?
• TARIFF: a tax on imported good
• Ex. Between 2002-2003, US had a tariff on
imported steel to help steel-makers in the US
earn money!
How does the government limit trade?
• FREE TRADE: openly trading with other
countries
• Ex. North American Free Trade Alliance
(NAFTA) between Canada, Mexico, and the
US—we can trade freely!
LEAST LIMITED TRADE  MOST LIMITED TRADE
Which would you use if you were
trying to…
• Prohibit trade with another
country?
• Encourage trade with
another country?
• Protect American jobs and
industries that compete with
other countries?
Is globalization a positive or negative thing?
How has it impacted people around the world?
• http://www.youtube.com/watch?v=ruh0O_mj
1v0
• http://www.youtube.com/watch?v=pLwVycO7
Vk&playnext=1&list=PLFA3768BD2A38654D&fe
ature=results_main
Summarize: Is globalization and
interdependence a necessity for our survival?
• On the back of your
paper, answer the
above question in at
least 5 sentences.
– Be sure to include 3
of the below words:
– Interdependence,
Quota, China,
favorable balance of
trade, unfavorable
balance of trade,
comparative
advantage,
A look inside the Jean Curtain
http://www.youtube.com/watch?v=nwMZ2b9hdTY
http://www.youtube.com/watch?v=CCrUZuyZHyk
– A look inside the “Denim Curtain”…
– Take notes on things that strike you as concerning.
– Is globalization a necessary evil?