International Trade

International Trade - International Trade Trade Polity and...

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International Trade Trade Polity and Interaction New markets and new opportunities o Cheaper products More efficiency Threats: o Economic change o Regions may become richer or poorer A mixed bag o Benefits, but also a lot of bad things Trade is Mutually Beneficial Voluntary exchange Who are the actors? o Producers o Consumers Benefits both actors Division of labor and increased specialization o One country has lumber the other has gold They can trade efficiently Absolute advantage o One actor is efficient at producing X and another at Y Comparative advantage o Even is actor is not the MOST efficient in z it should specialize in what it does best, even if it is z Even if your not the best producer, keep producing it Hecksher-Ohlin trade theory o Capital abundant countries give capital abundant goods to labor abundant countries. And other way around Example: Capital abundant US exports technology, medicine, insurance services while
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International Trade - International Trade Trade Polity and...

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