Chapter 1: What is International Economics?

What does international economics study?

The economic interactions between countries and the problems that arise from them

What are the two main fields in international economics?

Real economics (trade flows, trade benefits, trade patterns, policies) and monetary economics (money and financial flows).

What are the main goals of studying international economics?

Understand global interdependence, trade impacts, and policy decisions

What drives the increase in trade flows?

Reduction in trade barriers, cheaper transport, and trade agreements

What are examples of trade agreements?

EU, NAFTA/USMCA

What are the potential negative effects of trade?

Unequal distribution of gains within and between countries

What is trade openness and how is it measured?

The average of exports and imports as a percentage of GDP

Why are trade statistics region-specific in analysis?

To study regional dependence on trade and identify trade patterns

What is the importance of government policy in trade?

Policies like tariffs, subsidies, and quotas affect trade flows and domestic markets.