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TOK Economics Lesson #11

TOK Economics Lesson #11. International Trade. Closed economy = C + I + G (Consumers + Investment + Government). Open economy = C + I + G + (X-M) Adds in Exports and Imports , also known as…. International Trade!. VIDEO TIME!. An oldie but a goodie (1951) –

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TOK Economics Lesson #11

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  1. TOK Economics Lesson #11 International Trade

  2. Closed economy = C + I + G(Consumers + Investment + Government) Open economy = C + I + G+ (X-M) Adds in Exports and Imports, also known as…. International Trade!

  3. VIDEO TIME! • An oldie but a goodie (1951) – How Foreign Trade Works http://www.youtube.com/watch?v=-74YMKm2NE8

  4. Trade surplus vs. Trade deficit • Surplus: Exports>Imports, or Net exports what country does this??? • Deficit: Imports>Exports, or Net imports know any country that does this?

  5. Which is better? The good side of each: • Trade surplus = More money and jobs, since people are buying all your stuff • Trade deficit = More stuff at cheaper prices! The bad side of each: • Trade surplus = Less stuff for your own people; dependent on foreign buyers • Trade deficit = Jobs and money are going overseas; dependent on foreign producers

  6. Another video? • DVD Video Ch. 37: Trade

  7. How does specialization explain why international trade is good?(Hint: everybody wins, at least in theory!) • APIP 7: Hatfields and McCoys

  8. Why do we import things that we could produce here? • Comparative advantage • Quality • Price • Variety

  9. What’s wrong with the “buy American!” argument? • $180,000 a year – that’s what!

  10. Who wins from imposing tariffs? Who loses?

  11. Who wins from imposing quotas? Who loses?

  12. What did the Great Depressionteach us about using tariffs to protect jobs? Hint: It didn’t turn out too well…..

  13. What are examples of embargoes on imports and exports?

  14. How could industry subsidiesbe unfair to free traders?

  15. Is NAFTA a good thing or a bad thing? How about the WTO? • DVD: Street Meet: G20 Protest http://www.youtube.com/watch?v=Y1yaTY4Iqwk&feature=related

  16. That is all for today Thanks for your attention!

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