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17. International Trade Policy

VIEWS: 3 PAGES: 33

  • pg 1
									  Chapter 17. International
 Trade Policy, Comparative
Advantage, and Outsourcing
 17.A. Patterns of Trade
 17.B. The Principle of Comparative Advantage
 17.C. Comparative Advantage In Today’s Economy
 17.D. Varieties of Trade Restrictions
 17.E. Reasons for Trade Restrictions
 17.F. Why Economists Generally Oppose Trade
 Restrictions
 17.G. Institutions Supporting Free Trade




 Dr. Tufte's ECON 2020 PowerPoint slides to accompany   1
                    Colander's text.
      17.A. Patterns of Trade
17.A.1. Increasing but Fluctuating World
  Trade
17.A.2. Differences in the Importance of
  Free Trade
17.A.3. What and with Whom the United
  States Trades
17.A.4. Debtor and Creditor Nations

    Dr. Tufte's ECON 2020 PowerPoint slides to accompany   2
                       Colander's text.
 17.A.1. Increasing but Fluctuating
            World Trade
Is international trade a more important or
  less important of the world economy than
  50 years ago?
  How about 75 years ago?
  What happened in between?




    Dr. Tufte's ECON 2020 PowerPoint slides to accompany   3
                       Colander's text.
       17.A.2. Differences in the
       Importance of Free Trade
Do all countries trade the same amount?
  Is trade a relatively large or small part of the
    U.S. economy?
What is the relationship between exports
 and imports?




     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   4
                        Colander's text.
 17.A.3. What and with Whom the
       United States Trades
Who do we export the most to?
Who do we import the most from?
What extra information did Dr. Tufte clarify in
 lecture about these results?




     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   5
                        Colander's text.
     17.A.4. Debtor and Creditor
              Nations
Does a trade deficit “feel good”?
How does a country finance a trade deficit?
  Is a country that finances a trade deficit this way
    known as a debtor or a creditor?
     Do those labels have anything to do with debt or
      credit?
Did the U.S. always have a trade deficit?


     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   6
                        Colander's text.
17.B. The Principle of Comparative
           Advantage
What kind of costs determine who produces
  which goods and who trades for which
  goods?
17.B.1. The Gains from Trade
17.B.2. Dividing Up the Gains from Trade




    Dr. Tufte's ECON 2020 PowerPoint slides to accompany   7
                       Colander's text.
 17.B.1. The Gains from Trade
Do both parties to a trade have the potential
 to get gains from trade?
  What does this have to do with them trading
   voluntarily?
Finding situations where trade can lead to
  gains amounts to shipping goods from
  where they have _______ opportunity cost
  to where they have ___________.

     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   8
                        Colander's text.
17.B.2. Dividing Up the Gains from
               Trade
Does comparative advantage tell you who
 gets the most gains from trade?
Why is competition among traders important
 for countries?
Who tends to benefit the most from trade,
 small or large countries?
Who tends to benefit the most from trade,
 countries with firms that can benefit from
 being larger, or others?
    Dr. Tufte's ECON 2020 PowerPoint slides to accompany   9
                       Colander's text.
 17.C. Comparative Advantage In
        Today’s Economy
Is it easy to see the gains from trade?
  Is it easy to see the losses?
Do low wages guarantee a comparative
  advantage?
Is trade just merchandise, or is there more
  to it than that?
17.C.1 Other Sources of U.S. Comparative
  Advantage
17.C.2. Some Concerns About the Future
     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   10
                        Colander's text.
   17.C.1 Other Sources of U.S.
     Comparative Advantage
Can you name the 10 sources of our
 comparative advantage that have little to
 do with production?




    Dr. Tufte's ECON 2020 PowerPoint slides to accompany   11
                       Colander's text.
17.C.2. Some Concerns About the
            Future
Once attained, are comparative advantages
  unchangeable?
Trade tends to do what to price differences?
So what will happen to the economic
  differences between us and (say) China?




     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   12
                        Colander's text.
         17.D. Varieties of Trade
               Restrictions
17.D.1. Tariffs and Quotas
17.D.2. Voluntary Restraint Agreements
17.D.3. Embargoes
17.D.4. Regulatory Trade Restrictions
17.D.5. Nationalistic Appeals




    Dr. Tufte's ECON 2020 PowerPoint slides to accompany   13
                       Colander's text.
    17.D.1. Tariffs and Quotas
A tariff is a tax on what?
  What does it do to price? Quantity sold?
What was Smoot-Hawley?
What was GATT? The WTO?
How is a quota different from a tariff?
Generally, which do governments prefer,
 tariffs or quotas?
  How about firms?
     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   14
                        Colander's text.
     17.D.2. Voluntary Restraint
            Agreements
Why would anyone voluntarily restrict their
 exports?




     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   15
                        Colander's text.
             17.D.3. Embargoes
Why would anyone voluntarily restrict their
 imports?




     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   16
                        Colander's text.
       17.D.4. Regulatory Trade
             Restrictions
Can you describe two ways in which
 regulatory measures could be used to
 restrict trade?




    Dr. Tufte's ECON 2020 PowerPoint slides to accompany   17
                       Colander's text.
  17.D.5. Nationalistic Appeals
Can you describe how this works?
What does it have to do with the location of
 plants, as opposed to the home office of a
 company?




     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   18
                        Colander's text.
         17.E. Reasons for Trade
               Restrictions
17.E.1. Unequal Internal Distribution of the Gains
  from Trade
17.E.2. Haggling by Companies Over the Gains
  from Trade
17.E.3 Haggling by Countries Over Trade
  Restrictions
17.E.4. Specialized Production
17.E.5. Macroeconomic Aspects of Trade
17.E.6. National Security
17.E.7. International Politics
17.E.8. Increased Revenue Brought In By Tariffs
     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   19
                        Colander's text.
      17.E.1. Unequal Internal
    Distribution of the Gains from
                 Trade
Do the gains from trade benefit a generally
 small or large group?
Do the problems created by trade hurt a
 generally small or large group?
Which groups voice usually heard by
 politicians?


     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   20
                        Colander's text.
  17.E.2. Haggling by Companies
    Over the Gains from Trade
What is strategic bargaining?




    Dr. Tufte's ECON 2020 PowerPoint slides to accompany   21
                       Colander's text.
17.E.3 Haggling by Countries Over
        Trade Restrictions
What is strategic trade policy?
How can you justify threatening to restrict
 someone’s trade as a way to make trade
 more free?




     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   22
                        Colander's text.
17.E.4. Specialized Production
Why might it be good to restrict trade now?
  Does this sound like an argument that can
   always be used to justify trade restrictions?
What’s an infant industry?




     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   23
                        Colander's text.
17.E.5. Macroeconomic Aspects of
             Trade
Trade restriction is more politically palatable
  when the economy is in what state?




     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   24
                        Colander's text.
     17.E.6. National Security
What sort of exports would we restrict for
 this reason?
What sort of imports would we restrict for
 this reason?
What’s the problem with this as a
 justification?



     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   25
                        Colander's text.
   17.E.7. International Politics
What countries do we single out for trade
 restrictions for political reasons?




     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   26
                        Colander's text.
     17.E.8. Increased Revenue
        Brought In By Tariffs
Why do governments like tariffs?




     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   27
                        Colander's text.
  17.F. Why Economists Generally
     Oppose Trade Restrictions
Do a majority of economists put much stock in any
 of the arguments from the preceding section?
17.F.1. Free Trade Increases Total Output
17.F.2. International Trade Provides
  Competition
17.F.3. Restrictions Based On National
  Security Are Often Abused or Evaded
17.F.4. Trade Restrictions Are Addictive
     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   28
                        Colander's text.
17.F.1. Free Trade Increases Total
              Output
Why is retaliation a problem with trade
 restrictions?
What does this have to do with total output?




     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   29
                        Colander's text.
      17.F.2. International Trade
        Provides Competition
Does international competition tend to make
 industries more of less efficient?




     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   30
                        Colander's text.
  17.F.3. Restrictions Based On
National Security Are Often Abused
            or Evaded
Is it reasonable to use national security to restrict
   trade?
   Then what’s the problem?
What is a transshipment?




      Dr. Tufte's ECON 2020 PowerPoint slides to accompany   31
                         Colander's text.
    17.F.4. Trade Restrictions Are
               Addictive
Is history supportive of the idea that trade
   restrictions can only be limited to beneficial
   ones?




      Dr. Tufte's ECON 2020 PowerPoint slides to accompany   32
                         Colander's text.
 17.G. Institutions Supporting Free
                 Trade
What is the WTO?
  What was GATT?
What is a free trade association?
  What is a potential problem with one?
What is most favored nation status?




     Dr. Tufte's ECON 2020 PowerPoint slides to accompany   33
                        Colander's text.

								
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