1. International Economics and Trade
Introduction to Economics
Johnstown High School
Mr. Cox

2. Trade Why do nations trade?
How would the US benefit from trading with another nation?
How would a nation, such as Japan, benefit in a different way?
Nations trade when they do not have the resources or the capacity to satisfy their own needs and wants
Goods/Services
Factors of production
Competition to lower prices
Labor markets

3. Regulating International Trade
ChromeBook research
Research and provide responses to the following prompts: G7
What is it? (members?)
What is its role in a global economy?
G20
BRIC
What is BRICS?
You must also provide proper citations for each source used

4. Free Trade and Protectionism
Protectionism: policy of protecting domestic economies by taxing imports (protective tariffs)
Free Trade: International agreements wherein countries do not restrict imports from or exports to another nation or group of nations
Examples
NAFTA (North American Free Trade Agreement)
US, Canada, and Mexico can trade duty-free (tax free) across borders without restive taxes or trade limits.
No taxes placed on imports from any of the other countries, which promoted trade between the three countries

5. Impacts
Canada: Expect slight increase in US employment from more competitive firms & goods substitution
Mexico: US employment increase from “trickle-down”: Increased demand in Mexico for US goods => increase in US employment.
USA
Expand goods market
Expand investment opportunities
Stabilize Mexico for US investment
Reduce illegal immigration
Develop both sides of border

6. Comparative Advantage
Country has an advantage when it can produce a good or service at a lower opportunity cost than competitors. Advantage is based on factors such as climate, factors of production, and technology. EXAMPLES?
Trade encourages a country to specialize in producing only those goods and services which it can produce more effectively and efficiently, and at the lowest opportunity cost.
Note: No $$ Discussed
Countries will export goods in which they have a comparative advantage and import those in which they do not.