Economics_Ch15 - 15(390-427 EMC Chap 15 9:11 AM Page 390 C...

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CHAPTER 15 International Trade and Economic Development CHAPTER 16 Stocks and Bonds 390
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An investment in knowledge always pays the best interest. Benjamin Franklin 391
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Why It Matters W e live in a global economy. Precision ice hockey equipment is designed in Sweden, financed in Canada, and assembled in Cleveland, Ohio. An advertising cam- paign is conceived in Great Britain, and footage for it is shot in Canada, dubbed in London, and edited in New York. A sports car is financed in Japan, designed in Italy, and assembled in Indiana, Mexico, and France using advanced electronic components invented in New Jersey and fabricated in Japan. A jet plane is designed in the state of Washington and in Japan and assembled in Seattle, with tail cones from Canada, special tail sections from China and Italy, and engines from England. As Americans deal more and more with people in other nations, they may learn things about other people that they either did not know before or did not stop to think about. This chapter considers an increasingly important activity of people in a global economy: trade. 392 In an increasingly global economy, the chances are good that the products these workers are loading for shipment will be used by people on the other side of the world. In this chapter you will learn why people specialize and why they trade with people in different countries.
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The following events occurred one day in November. 12:04 P.M. Samantha Lawrence is packing for a trip to Paris. Tomorrow, at 5:30 p.m., she will leave from JFK Airport in New York. She will spend five days in Paris, then go to England, where she will spend two days in London, one day in Oxford, and then take a train to Scotland, where she will spend four days in Edinburgh and one day in Glasgow. Although the dollar has been falling in value relative to the euro and the pound, she is still going on her trip. • What does the value of the dollar have to do with a trip overseas? 1:23 P.M. Carla Rodriguez is a reporter for a local TV station. She is currently in the office of Vernon Milson, who owns a small business in New Mexico. Carla Rodriguez asks, “Is your business expected to increase its sales this year?” Milson looks at her and says, “A lot depends on whether the administration in Washington imposes tariffs on our foreign competitors.” • How will imposing tariffs on his foreign com- petitors affect Milson’s business? 3:04 P.M. In Jacob’s family, each person has certain duties and responsibilities. His mother and father share responsibilities for the family finances, shopping, and preparing meals. His younger sister takes care of the family pets. Jacob’s job is to take out the trash, keep his room clean, and mow the lawn. Right now, he is mowing the lawn. As he mows, he thinks, “I wonder why it is always my job to mow the lawn.” • Why do family members often specialize in performing certain tasks?
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Economics_Ch15 - 15(390-427 EMC Chap 15 9:11 AM Page 390 C...

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