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2023Ch5SumMcBr - The U.S in the Global Economy Chapter 5...

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The U.S. in the Global Economy Chapter 5
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Outline The international sector Volume of trade Benefits of trade Comparative advantage Foreign exchange market Currency appreciation and depreciation Currency price relationships Converting a foreign price to a U.S. dollar price
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The international sector deals with exports and imports of goods and services. Exports are goods and services sold to those outside the country, while imports are goods and services purchased from other countries. “Net exports” would be exports minus imports. Currently, for the United States, imports of goods and services are greater than exports, meaning net exports are negative and we have a trade deficit overall. When exports are greater that imports, a trade surplus occurs. Our leading trading partner (country), considering both exports and imports, is Canada. The international sector
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Trade has grown rapidly for the U.S. over the past several decades. Although as a percentage of world trade the numbers half fallen from 1/3 to 1/8 of world trade since 1950, the U.S. is still the world’s leading trading nation in absolute terms. As a percentage of GDP, U.S. exports are about 11%, with U.S. imports much higher at 16%. Major exports of the U.S. include: chemicals, consumer durables, agricultural products, semiconductors and computers. Major imports of the U.S. include: oil, automobiles, household appliances, computers, metals and clothing. The volume of U.S. trade
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International trade, in general, can expand a country’s output possibilities beyond its production possibilities curve. Economic growth increases and, with global competition, prices fall while choices increase. The Word Trade Organization (WTO), consisting of about 150 countries, encourages free trade. Trading blocs, or free-trade zones, do the same. Prime examples include
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