Unit 10 - International Trade

Buying and selling of goods and services across national borders

International trade

Depending and relying on each other

Interdependent

Globally-connected and interdependent of the economies and populations of different countries

Globalization

Own businesses in different countries

Multinational corporations

Two concepts that must exist for a country to have a market advantage

More productive resources than another country, more productive resources at a lower cost than another country

Explain absolute advantage

With same productive resources, a country produces with less inputs than another country

Explain comparative advantage

When a country can produce a good at a lower opportunity cost than another country (two types of products)

Rate at which a nation trades with other nations

Balance of trade

When a nation exports more than it imports

Trade surplus

When a nation imports more than it exports

Trade deficit

Using trade restrictions to protect domestic industries

Protectionism

Limit on the number of units or the amount of a particular good that can be imported into a country

Quota

Special taxes placed on products imported from another country

Tariff

When countries try to hurt each other’s economy through tariffs

Trade war

Payment from the government to businesses to promote an economic goal

Subsidy

Health and safety guidelines for products

Standards

3 ways subsides can be used

Take place of trade barriers, discourage overproduction, support vital industries

Explain major drawback of subsidies (2)

Usually requires higher taxes, keeps less-efficient domestic industries alive

Restrict or limit trade or financial transactions (buying or selling) with a country in order to accomplish a political goal

Sanctions

Cut off all trade with a particular country to pressure the country to take certain actions or change its policies

Embargo

International trade without government restrictions

Free trade

Economically secure country with a high level of industry and technology and a high standard of living

Developed country

Low standard of living and lacks productive resources or the ability to use them

Developing country

Agreements between two or more countries to reduce or eliminate trade barriers between them

Free trade agreements

Important organizations created by several governments in a geographical region

Trade blocs

27 European countries with their own currency created in 1993

European Union (EU)

Free trade agreement between US, Mexico, and Canada, established in 1994 and renegotiated in 2019

United States-Mexico-Canada Agreement (USMCA)

10 members and was established in 1967

Association of Southeast Asian Nations (ASEAN)

Establishes rules for international trade and helps resolve disputes between 164 member nations, established in 1995

World Trade Organization (WTO)

NC rank in physical size, population, and GDP

28, 9, 12

What is the biggest employer in NC?

Service industry

Where does charlotte rank in the US in banking?

2nd, behind NYC

List 3 major manufacturing industries in NC

Food processing, pharmaceuticals, plastics and chemicals

Research and development of military material, and production of military goods

Defensive services

Identify/explain knowledge industries in NC (4)

Business and financial services (banking, investments, insurance), pharmaceuticals (medicines), biotechnology (using biological systems to create new products), information technology (computers, phones, etc.)

Designing, producing, and distributing clothing, fabric, and yarn

Textiles

List 3 forest-related industries

Timber, furniture, paper and pulp

Wilmington and Morehead City

2 major ports in NC

International trade is what percent of jobs and GDP?

20% of jobs, 6% to GDP