Chap 9 trade theory - 2007 Robert Sweo International Trade...

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Unformatted text preview: 2007 Robert Sweo International Trade Theory 2007 Robert Sweo Mercantilism Mercantilism - Pillage the lands - do whatever it takes to increase your trade surplus. Used high import barriers and export subsidies. Increased national wealth but decreased consumer satisfaction Neomercantilism- the more recent strategy of countries that use protectionist trade policies in an attempt to run favorable balances of trade and/or accomplish particular social or political objectives 2007 Robert Sweo Absolute Advantage Adam Smith 1776- It is better for countries to specialize production in something they are particularly good at- Free trade is better 2007 Robert Sweo Absolute Advantage 2007 Robert Sweo Comparative Advantage What happens if one country is better at producing both goods? Is it still better off trading? According to comparative advantage - Yes. 2007 Robert Sweo Comparative Advantage 2007 Robert Sweo But what about other costs then labor?But what about other costs then labor?...
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This note was uploaded on 10/28/2009 for the course ACG 3141 taught by Professor Graybeal during the Spring '08 term at University of Central Florida.

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Chap 9 trade theory - 2007 Robert Sweo International Trade...

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