MT 4 - \u25cf History of global trade \u25cb Trade the action of buying and selling goods\/services \u25a0 Imports-bring into country from abroad for sale \u25a0

MT 4 - u25cf History of global trade u25cb Trade the...

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History of global trade Trade- the action of buying and selling goods/services Imports-bring into country from abroad for sale Exports- send to another country for sale The Silk Road - developed East Asia to Middle East Civilization Marco Polo 4,000 mile trade route that stretched China in the fertile crescent in Asia opened by Han Dynasty The Roman Empire - Europe and North Africa The Columbian Exchange Established after Christopher Columbus voyage to America in 1492 Today Global Economy globalization - businesses/organizations develop international influence or start operating on an international scale World economy Comparative Advantage - economy’s ability to produce goods and services at a lower opportunity cost than trade partners Opportunity costs involved when choosing to manufacture multiple types of goods with limited resources Country has resources to create variety Opportunity cost-one over the other David Ricardo (real benefits of international trade were discovered) Absolute Advantage - ability of an individual , company or country to produce a good or service at a lower cost than any competitor One country can manufacture a product at higher quality with faster rate Single good (isolation) Avoid production of products that would produce less or no demand (loss) Cars in Japan - America should chose another products instead of competing Specialization - focus on the product of those goods for which a nation’s resources are best suited. ADAM SMITH Wealth of Nations Countries should specialize in goods they can produce most efficiently and trade those goods for others they can’t produce well
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