1. International Trade Ch. 16
Economics
Bennett

2. Why Trade? Exports (Outgoing – Sell - Supply)
Imports (Incoming - Buy - Demand)
Absolute Advantage:
When a country can produce more of a product than another country
Comparative Advantage:
When a country can produce a product more Efficiently, or at a lower opportunity cost.

3. Barriers to Trade Tariff: Quota:
A tax placed on an Imported product
Quota:
Limit on the amount of a good that is allowed in a country
Nationalism / Country pride vs. protecting jobs in an economy
Personal preference…some people want the cheapest item regardless of how or where it was made
Walmart

4. NAFTA North American Free Trade Agreement CAFTA:
Reduced tariffs & promote trade amongst USA, Mexico, & Canada.
CAFTA:
Central American Free Trade Agreement

5. Trade Deficits & Surpluses
Occurs when a country’s value of imports exceeds the value of their exports.
Trade Surplus:
Occurs when a country’s value of exports exceeds the value of imports.
All dependent on the value of the dollar internationally.