Why Trade
Trade allows access to a wider variety of ________and ____________.
Goods; Services
Specialization means focusing on a specific task or ___________.
Product
What is this describing?:
Government-imposed restrictions on international trade.
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Trade Barriers
Taxes on imported goods.
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Tariffs
The increasing interconnectedness between countries.
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Globalization
Examples:
International Trade
Investments
Cultural Exchange
Specialization makes production more __________.
Efficient
Specialization allows individuals and ____________to become experts.
Businesses
What is this describing?:
The exchange of goods and services between countries.
International Trade
Which barrier to trade is this describing?:
- Limits on the quantity of a good that can be imported.
- Supply is decreased and price increases
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Quotas
The increase in the production of goods and services in an economy over time.
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Economic Growth
Examples of Importance to Economic Growth:
- Leads to higher living standards for citizens.
- Creates more jobs and opportunities.
- Increases government revenue for social programs.
Trade encourages ____________, leading to lower prices and better quality.
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Competition
With specialization, increased _________leads to greater efficiency and productivity.
What is this describing?:
A country can produce a good or service more efficiently than another country, even if it's not the absolute best at producing either.
Comparative Advantage
What barrier to trade is this describing?:
Government financial assistance to domestic producers.
Subsidies
What is this describing?:
–The cost of getting something is really the value of the next best alternative that is not chosen
•Think about the choices you make
–Nap or workout on Sunday afternoon
–Beach or mountains or city for vacation
Opportunity Cost
Trade occurs when parties expect to ___________.
Gain/Profit
Specialization necessitates ______
Trade
What is this describing?:
Agreements between countries to reduce or eliminate trade barriers like tariffs (taxes on imports) and quotas (limits on import quantities).
Free Trade Agreements
Which historical figure did this?:
Proposed extensive tariffs to provide revenue and protect American manufacturers (rooted in mercantilism)
Alexander Hamilton
What is this describing?:
Actions taken by the Federal Reserve to influence economic activity and inflation.
Monetary Policy
What is this quote by Adam Smith describing?
"The natural advantages which one country has over another in producing particular commodities are sometimes so great that it is acknowledged by all the world to be in vain to struggle with them.”
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Absolute Advantage
Producers specialize in what they can produce at the lowest _________.
Cost
What are 2 of the 3 main barriers to trade we discussed?
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Tariffs
Quotas
Subsidies
In class, multiple times, we discussed the 4 main factors of economic growth. What are 2 of them?
Investment: Businesses investing in new machinery, technology, and infrastructure creates greater production capacity.
Technological advancement: Innovation and technological breakthroughs lead to increased efficiency and productivity.
Human capital development: A skilled and educated workforce is essential for a competitive economy.
Natural resources: Access to natural resources can provide a foundation for economic development, but resource dependence can also be risky.
Name one of the 3 main tools of monetary policy that the Federal Reserve can use.
Interest rates: The Fed can raise or lower interest rates to influence borrowing and spending.
Reserve requirements: The Fed can change the amount of reserves banks must hold, which affects lending.
Open market operations: The Fed can buy or sell government bonds to influence the money supply and interest rates.