Why Nations Trade
The factors of production?
Land, labor, and capital
Restricts or prevents foreign products from entering a nation's border.
Trade Barrier
True of False? Money holds the same value in other countries.
False
The interconnected weave of international supplies, producers, and consumers.
Globalization
Because every nation lacks resources what does it lead to?
Trade
Most common trade barrier.
Tariff
Foreign Price X Exchange Rate to US Dollar = US Price
Exchange Rate Formula
This advancement has made transactions in the global market faster.
Transportation and communication
Nations have the opportunity to _____ or _____ resources depending on their needs.
Limits the amount of goods a nation can import.
Import Quota
The US Dollar is "stronger". What does that mean?
Appreciated
These ideas have allowed globalization efforts to be more widely accepted.
Free Market Ideas
List an advantage of global trade.
Comparative advantage, growing interdependence, or resource allocation
Allows an exporting nation to limit the amount of goods they export.
Voluntary Export Restraint (VERs)
The Canadian Dollar is "weak". What does that mean?
Depreciated
Allows nations to freely exchange furthering the cycle of globalization.
Trade Agreements
List a disadvantage of global trade.
Specialization/job loss, economic implications, or human rights violations
A type of economic sanction that withholds resources from a nation.
Embargo
You buy a train ticket in Venezuela for 300 Bolivar. How many US Dollars did you spend? (Use the Exchange Rate Formula and the Bolivar rate of $0.0041)
$1.23
A challenge of globalization.
Closely linked financial markets, Multinational corporations, Territorial sovereignty, or Loss of jobs