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Magnitude of Trading

Magnitude of Trading - US on Volume basis is world's...

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Econ 4.3 Monday, April 26, 1999 Announcements: Lecture notes: Magnitude of Trading As the currency of other countries goes down, US trading goes down Gains from International Trade Why Nations Trade? o Resources are distributed unevenly among nations o Given climates, labor skills and other resources end amount of production of some goods is relatively efficient, inefficient to others o With specializatoin, total output of all goods and services may be greater Two Major Trade Ideas 1. Countries usually benefit from free trade with each other 2. Usually, agreements calling for protection from foreign competition represent special interests which often work against the general interest -- or are short sighted
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Unformatted text preview: US on Volume basis, is world's largest trading nation • US balance of trade = US exports - US imports • US balance of trade > 0, net exporter • US balance of trade < 0, net importer Trade Goods and Services, US • Goods -- about 2/3 of US international trade • Net Exporter of grains, chemicals, aircraft • Net importer of machinery, fuels • Services Exports Imports Transportation from US residents to fly abroad X French buy US tickets X Meals, hotels, in other countries X Meals, hotels bought by foreigners in US X Goo ds US Wouldn't have Without Importing • Bananas • Cocoa, spices • coffee, tea • raw silk • nickel, tin • natural rubber • diamonds...
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