lecture notes_Ch.1 - EC239: International Trade Ch. 1...

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EC239: International Trade Ch. 1 Introduction
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Agenda Course Syllabus Why is trade important for Canada Central issues in international trade Relationship between international trade and finance
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Course Introduction Website: mylearningspace.wlu.ca Textbook MyEconlab: www.myeconlab.com Evaluation Presentation
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Why is trade important for Canada Nations are more closely linked. International trade is a very important element of GDP International trade as a fraction of the national economy has tripled for the U.S. in the past 40 years. Compared to the U.S., other countries are even more tied to international trade.
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1-6 Fig. 1-1: Exports and Imports as a Percentage of U.S. National Income Source: U.S. Bureau of Economic Analysis
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1-9 Fig. 1-2: Exports and Imports as Percentage of National Income in 2007 Source: Organization for Economic Cooperation and Development
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Central issues in international trade Gains from trade Economists view trade as beneficial to both countries. Two typical questions tend to be asked are: Can poor countries compete with the countries that are more productive/technologically advanced than us? Can developed countries compete with countries that pay very low wages?
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Gains from Trade Several ideas underlie the gains from trade. 1. When a buyer and a seller engage in a voluntary transaction, both can be made better off. Norwegian consumers import oranges that they would have a hard time producing. The producer of the oranges receives income that it
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lecture notes_Ch.1 - EC239: International Trade Ch. 1...

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