ECO 212 Week 5 Learning Team Assignment International Trade Simulation and Report

ECO 212 Week 5 Learning Team Assignment International Trade Simulation and Report

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Trade Simulation and Report 1 International Trade Simulation and Report Introduction Import and export is the essence of our world economy. Most if not all the countries around the world export and import goods and services depending on there needs to do so governments exercise there findings with careful consideration, limitations and restrictions. In the following paper we will attempt to discuss the advantages and limitations of international trade, we will provide analysis of absolute and comparative advantages and influence affecting foreign exchange rates. We also will review the team concept summary results and discuss as a team to evaluate the effect of government policy on economic behavior.
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Trade Simulation and Report 2 a) List at least one advantage and one limitations of International Trade as identified in the simulation. One advantage of International Trade identified in the simulation is Free Trade Agreements. Free trade agreements reduce barriers of trade, increase the amount of items that can be traded, allow countries to look at different markets, allow customers to be able to purchase improved products and open additional resources for investment. The above can increase employment within all countries that participate. One limitation of International Trade as identified in the simulation is also Free Trade Agreements. For countries that do not participate in Free Trade Agreements their barriers to trade are high. The countries that do not participate in Free Trade Agreements find that the tariff is so high their income is reduced on their goods.
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Trade Simulation and Report 3 b) Identify four key points from the reading assignments that were emphasized in the simulation. There are key points that must be taken into consideration with International trade: gains and losses, tariffs, trade restrictions, and free trade. Gains and losses can is how much the economy will gain to offset how much it will lose in trade. If the gains outweigh the losses, trade will be beneficial. The overall goal of trade is to raise the Gross Domestic Product (GDP) and sustain a healthy economy. The second key point is tariffs. Tariffs are taxes imposed on imports. Tariffs are used to give domestic suppliers a competitive pricing within the same market. If import goods cost less than domestic goods, domestic companies will suffer causing a loss of jobs and eventually the business may be forced to close. Tariffs can provide opportunity for new or lesser businesses and assist in repairing a declining economy. Trade restrictions are the next key point that we are addressing. Restrictions are put on the amount of imports which means that the exporter is being instructed to only take a certain number of any given product during a given period. These restrictions force the exporter to produce less of the product which in turn hurts their country’s economy. Trade restrictions are normally the beginning steps towards a declining trade agreement; imposed when a country is in
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ECO 212 Week 5 Learning Team Assignment International Trade Simulation and Report

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