LECTURE NOTES Chapter 37

LECTURE NOTES Chapter 37 - CHAPTER 37 INTERNATIONAL TRADE...

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CHAPTER 37 INTERNATIONAL TRADE INSTRUCTIONAL OBJECTIVES After completing this chapter, students should be able to: 1. Summarize the importance of international trade to the U.S. in terms of overall volume. 2. List the major imports and exports of the United States. 3. State two economic points that explain why nations trade. 4. Compute, when given appropriate data, the relative costs of producing two commodities in two countries and determine which nation has the comparative advantage in each good. 5. Compute, when given appropriate data, the range for the terms of trade. 6. Calculate the potential gains from trade and specialization for each nation and the world when given appropriate data. 7. State the economist’s case for free trade. 8. Explain the relationship between world prices and American export supply curve, and the relationship between world prices and American import demand curve. 9. Explain international equilibrium price and quantity using a two-nation market model for import demand and export supply. 10. Identify four types of trade barriers. 11. Describe the economic impact of tariffs, including both direct and indirect effects. 12. Contrast the economic impact of a quota with that of a tariff. 13. List seven arguments in favor of protectionist barriers, and critically evaluate each. 14. Identify the costs of protectionist policies and their effects on income distribution. 15. Describe the major provisions of NAFTA and GATT. 16. Describe U.S. government policies designed to promote American exports. 17. Explain the meaning of most-favored-nation status for China. 18. Define and identify terms and concepts listed at the end of the chapter. LECTURE NOTES I. Facts of International Trade: Highlights A. Exports of goods make up about 12% of total U.S. output. [(See) Global perspective 37-1] B. The U.S. leads the world in the volume of exports and imports C. Since 1995 U.S. exports and imports have more than doubled as a percentage of GDP. D. In 1996 the U.S. had a trade deficit of $191 billion dollars. 472
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International Trade E. The principal exports of the U.S. are computers, chemicals, semiconductors, consumer durables, and aircraft. Its main imports are petroleum, automobiles, computers, and clothing . F. The U.S. exports many of the “same” goods it imports. G. The bulk of U.S. trade is with other industrialized nations. H. Improved transportation, peace, reduction in trade barriers, and communication has contributed greatly to international trade since WWII. I. Although the U.S. still dominates world trade, there are emerging nations around the world that collectively generate substantial international trade. J. International trade and finance link economies. K.
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LECTURE NOTES Chapter 37 - CHAPTER 37 INTERNATIONAL TRADE...

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