10.7.10 - 10.7.2010 The United States in the Global Economy...

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10.7.2010 The United States in the Global Economy International Linkages Goods and services flows, trade flows Exports (X) are outflows Imports (M) are inflows Net exports (Xn) = X – M Xn = $42B - $111B = -$69B If Xn is negative, X < M, trade deficit exists If Xn is positive, X > M, trade surplus exists Capital and labor flows Information and technology flows Financial glows US and World Trade Volume and pattern Dependence Trade patterns Trade deficit o Borrow from foreigners o Sell real assets to foreigners Trade surplus o Lent to foreigners
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Financial linkages Rapid Trade Growth Transportation technology Communications technology General Decline in Tariffs Tariffs – excise taxes on imported products Participants in International Trade Specialization and Comparative Advantage Specialization Shift resources to export industry Achieve higher overall output Absolute advantage
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10.7.10 - 10.7.2010 The United States in the Global Economy...

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