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Chapter-05 - International Linkages Goods Services United...

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11/19/2010 1 International Linkages United States Economy Other National Economies Goods & Services Capital & Labor Information & Technology Money 5-2 • Trade deficit: Imports exceed exports Borrow from foreigners Sell real assets to foreigners • Trade surplus: Exports exceed imports Lend to foreigners 5-3 0 2 4 6 8 10 12 14 16 18 20 Percentage of GDP US Trade as percentage of GDP Exports of goods and services Imports of goods and services Source: Bureau of Economic Analysis Goods by area – 2009p Canada European Union Mexico China Japan OPEC countries All other TOTAL Canada European Union Mexico China Japan OPEC countries All other TOTAL Exports to Imports from Source: Survey of Current Business, June 2010 Value Value $206 217 129 69 50 48 327 $1046 $227 281 180 297 96 112 370 $1563 5-5 • Shift resources to export industry • Achieve higher overall output and income • Absolute advantage –Higher output per worker for a good • Comparative advantage –Lower domestic opportunity cost for a good 5-6
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