ECON312 Week 7 Discussion Latest 2019 January

ECON312 Principles of Economics

Week 7 Discussion

INTERNATIONAL TRADE AND EXCHANGE RATES

INITIAL POST (UP TO 10 POINTS)

Trade is the exchange of goods for goods or labor service for money (indirect). Trade is based on what people can do well given their factor endowment (knowledge, abilities, skills, and resources). International trade is the exchange of good, services, and capital across international borders. International trade is based on the concept of comparative advantage, which is the country's ability to produce a good or a service at a lower opportunity cost than other countries. Factor endowment is generally what determines the country's comparative advantage. It is assumed that if every country is specialized in producing what they are good at producing (meaning lower opportunity cost), every country will have more goods and services and more income.

For your initial post, answer one of the following questions.

1. Take a closer look at our local economy or a country of your interest and pick a good or a service that you believe America (or your country of choice) has a comparative advantage in producing. Discuss the factors that you believe give America (or your country of choice) such an advantage.

2. In addition, which is better for a country—to export more or to import more?

3. Moreover, what is the impact of trade surplus (exporting more than importing) and trade deficit (importing more than exporting) on GDP, employment, and the exchange rate of the country's currency?

MULTIMEDIA POST (UP TO 15 POINTS)

Create a short 1- to 2-minute slide presentation with a voice narration or a video using any technology you are comfortable with to explain one of the economic concepts listed below. Suggestions: Adobe Spark Page (Links to an external site.)Links to an external site. with a Spark Video, Kaltura video post, or a narrated PowerPoint.

Start the presentation by introducing yourself (name and your topic of choice), and then give a brief explanation of at least one of the concepts listed below, including an example to support your presentation.

International trade

Comparative advantage

Absolute advantage

Production possibilities curve

Exports and imports

International specialization

Gains from trade

Barriers of trade: Tariffs and quotas

Foreign exchange

Flexible exchange rate

Fixed exchange rates