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The Target Standard 4

The Target Standard 4. Trade makes us depend on each other. Did You Know?.

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The Target Standard 4

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  1. The TargetStandard 4 Trade makes us depend on each other.

  2. Did You Know? • People use their resources to help themselves. Susan is really good at knitting mittens but she doesn’t have enough yarn. Her friend, Karen, produces yarn but needs mittens. Both have specialized: Susan specializes in knitting (service) and Karen specializes in yarn (good). What could they do so that both of their wants are satisfied?

  3. Did You Know? • Susan will depend on Karen for yarn since she doesn’t have any. Karen will depend on Susan to make the mittens. They need each other. When two people depend on each other they are interdependent.

  4. Did You Know? Countries also have interdependence. Costa Rica has lots of banana farms. America doesn’t grow bananas. Costa Rica needs equipment to make goods. America can provide that equipment. America and Costa Rica are interdependent.

  5. Did You Know? • When countries are interdependent there are more goods for consumers, the people who use the goods. It also means they may trade with other countries to get the goods they don’t produce.

  6. Did You Know? • When producers specialize, they are able to produce a good at the lowest cost. These same producers will trade for other goods that may be too expensive for them to produce. Both will trade because they expect to be better off.

  7. Did You Know? • Trading between countries is called international trade. It results in consumers having more and different goods and services. When both countries trade, many people in these countries benefit. www.bbna.com/.../images/pages/freighter_jpg.htm

  8. Did You Know? • There may be costs to international trading. A problem arises if one country begins to specialize in the same goods or services as another. People may lose their jobs or may not be paid enough for their labor.

  9. Think About It • What trading problem might be created if a country like Germany starts to specialize in making the same kinds of goods as the Mexico? How could the problem be solved?

  10. Understanding economics helps us make better choices!

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