1. Globalization and Interdependence

2. 1.) The Business Cycle Quiz ___________

3. 2.Which is NOT an economic indicator? a. GDPb. Unemployment c. PPId. Starving Population 3. The amount of final goods a country produces is known as what? a. GDP per capitab. PPIc. CPId. GDP 4. Because prices of goods have continually gone ______, our country is suffering from _________________. a. up, inflationb. down, inflationc. up, deflationd. down, deflation 5. If there is a BULL market, which phase of the business cycle are we likely in? a. Expansionb. Contractionc. Troughd. Boom

4. ____6. Which type of voting occurs when a person plans to vote for every Democrat on the ballot? A split ticketb. A straight ticketc. A strong ticketd. A short ticket ____7. Which election allows voters to choose a candidate to represent their party? closed election b. general election c. open election d. primary election closed election b. general election c. open election d. primary election ____8. In which type of primary election can members of either party vote? Closedb. Openc. Splitd. Straight ____9. How are caucuses different from primary elections? Caucuses are meetings of voters where discussions and support for candidates can be debated Primaries can only be held after the general election Primaries are only used in large states where voters select candidates at the same time. Caucuses do not have the power to designate a political candidate as a party's caucus winner. ____10. If no presidential candidate obtains a majority in the Electoral College, how is the president chosen? The former president appoints the new president The House of Representatives chooses the president The Senate chooses the president The winner of the popular vote becomes president

5. Goals Explain how people and businesses are interconnected by the world economy. Explain how people and businesses are interconnected by the world economy. Explain the impact of interdependence on the world. Explain the impact of interdependence on the world.

6. Warm-Up Look at a tag on something you are wearing. Where did it come from? Look at a tag on something you are wearing. Where did it come from? Where else do you think most of the items you own come from? Where else do you think most of the items you own come from?

7. Key Terms Globalization: political and economic connections and communication. Globalization: political and economic connections and communication. Impact: Nations depend on one another for goods. You have sneakers from China and a shirt from Vietnam. Impact: Nations depend on one another for goods. You have sneakers from China and a shirt from Vietnam.

9. Interdependence: Countries are dependent on one another for goods/services/resources. They focus on producing what they are best at, and export it to other countries. Interdependence: Countries are dependent on one another for goods/services/resources. They focus on producing what they are best at, and export it to other countries. Impact: America produces financial services but is dependent on China for TVs, Clothes, Shoes, MP3s. Impact: America produces financial services but is dependent on China for TVs, Clothes, Shoes, MP3s. Dependence means you rely on someone or something else Dependence means you rely on someone or something else We’ll set up good banks for you if you give us TVs! OK! Deal.

10. What is the US Dependent on?

11. More Key Terms Favorable Balance of Trade: Export more than you import. Favorable Balance of Trade: Export more than you import. Why do you want to export more than you import? Why do you want to export more than you import? Impact: Because America imports more goods from China than we export to China we have an UNFAVORABLE balance of trade with China. Impact: Because America imports more goods from China than we export to China we have an UNFAVORABLE balance of trade with China.

12. Favorable or Unfavorable? Look at the table, how would you describe the US trade with Japan in 2009? Look at the table, how would you describe the US trade with Japan in 2009? ExportsImportsBalance 12,653,400,00021,676,700,000-9,114,300,00

13. Favorable or Unfavorable? Look at the table, how would you describe the US trade with Japan in 2009? **** Look at the table, how would you describe the US trade with Japan in 2009? **** ExportsImportsBalance 12,653,400,00021,676,700,000-9,114,300,00

14. More Key Terms Comparative Advantage: A country should specialize in producing the goods and services it is best at producing, and trade for other goods/services. Comparative Advantage: A country should specialize in producing the goods and services it is best at producing, and trade for other goods/services. Impact: Germany produces cars because it is better at producing cars than computers. It has a comparative advantage in car production and imports computers from Japan. Impact: Germany produces cars because it is better at producing cars than computers. It has a comparative advantage in car production and imports computers from Japan.

15. We USED to have a comparative advantage when it came to producing cars….. What happened?

16. Protection or trade barriers? Subsidies: Gov’t money given to producers, to reduce the cost of production. Subsidies: Gov’t money given to producers, to reduce the cost of production. Impact: increases production (supply), decreases price so that other countries want to buy the products. Impact: increases production (supply), decreases price so that other countries want to buy the products. Example: US rice farmers get a subsidy, rice production goes up, price of rice goes down, Kenya and France now buy rice from the US. Example: US rice farmers get a subsidy, rice production goes up, price of rice goes down, Kenya and France now buy rice from the US. Subsidies have been used a lot to encourage farmers to grow corn as an alternative fuel source Subsidies have been used a lot to encourage farmers to grow corn as an alternative fuel source

17. Protection or trade barriers? Tariffs: Taxes on imported goods Tariffs: Taxes on imported goods Impact: tariffs make consumers buy cheaper domestic goods over more expensive foreign products. Helps out our own industries. Impact: tariffs make consumers buy cheaper domestic goods over more expensive foreign products. Helps out our own industries. Example: in the 1980s all Japanese cars had tariffs, so people bought more American cars Example: in the 1980s all Japanese cars had tariffs, so people bought more American cars Do Tariffs make countries more or less likely to want to trade? Why? Do Tariffs make countries more or less likely to want to trade? Why?

18. Protections or Trade Barriers? Quotas: A limit on the amount of goods you can import from a certain country. Quotas: A limit on the amount of goods you can import from a certain country. Impact: protects domestic industry from cheap foreign goods. Impact: protects domestic industry from cheap foreign goods. Ex: The US can only import 621,780 kg of cotton from China Ex: The US can only import 621,780 kg of cotton from China What is the impact What is the impact of this on trade?

19. Protections or Trade Barriers? Embargoes: When the gov’t makes it illegal to trade with another nation. Embargoes: When the gov’t makes it illegal to trade with another nation. Impact: Hurts the nation that cannot receive goods, often the people who live there suffer. Impact: Hurts the nation that cannot receive goods, often the people who live there suffer. Example: US will not trade with Cuba b/c it is communist Example: US will not trade with Cuba b/c it is communist

20. US Embargo on Cuba U.S. Trade Embargo against Cuba. It is illegal to trade with companies in Cuba, we disagree with the communist ruler Fidel Castro and his government. We are hurting Cuba economically by not trading and raising the living standards of the country. U.S. Trade Embargo against Cuba. It is illegal to trade with companies in Cuba, we disagree with the communist ruler Fidel Castro and his government. We are hurting Cuba economically by not trading and raising the living standards of the country.

21. Regulation VS. Deregulation Regulation: gov’t puts limits or rules on business. Regulation: gov’t puts limits or rules on business. Deregulation: gov’t REMOVES limits/rules on business (better for free trade) Deregulation: gov’t REMOVES limits/rules on business (better for free trade) So, what are embargos, tariffs, and quotas all examples of?

22. International Free Trade Organizations There are also world-wide organizations that exist to reduce the barriers to trade.

23. NAFTA North American Free Trade Agreement North American Free Trade Agreement NAFTA impacts the USA because its goal is to eliminate all tariffs and trade barriers between Canada, the USA and Mexico by the end of 2009. NAFTA impacts the USA because its goal is to eliminate all tariffs and trade barriers between Canada, the USA and Mexico by the end of 2009.

24. EU European Union European Union 27 European countries are members. 27 European countries are members. Ensures the free flow of capital, people, goods & services. Ensures the free flow of capital, people, goods & services. No Tariffs between member countries No Tariffs between member countries All have a common currency (Euro) All have a common currency (Euro)

26. EU Flag

27. WTO World Trade Organization World Trade Organization To be part of the WTO you have to agree to reduce tariffs & eliminate quotas. To be part of the WTO you have to agree to reduce tariffs & eliminate quotas.

28. WTO: Members nations in dark blue

29. OUR WORLD TRADE GAME There are 8 different colors of paper. You are trying to get 1 of each piece in your possession. In order to do so, you much trade one piece for one piece with other people. There will be four rounds of trading. You WIN the game when you have 8 pieces of paper that are of all 8 colors PINK, GREEN, PURPLE, WHITE, BLUE, YELLOW, BLACK, ORANGE

30. ROUND 1: You can ONLY trade with the person Mr. Egan says you can, and you can ONLY trade one color.

31. ROUND 2: You can ONLY trade with the person Mr. Egan says you can, but you can now trade ANY color. PINK, GREEN, PURPLE, WHITE, BLUE, YELLOW, BLACK, ORANGE

32. ROUND 3: You can trade with anyone at your TABLE, but you can only trade ONE color

33. PINK, GREEN, PURPLE, WHITE, BLUE, YELLOW, BLACK, ORANGE ROUND 4: You can trade with anyone at your TABLE, but now you can trade any color

34. PINK, GREEN, PURPLE, WHITE, BLUE, YELLOW, BLACK, ORANGE ROUND 5: You can trade with anyone in the ROOM, but you can only trade one color.

35. PINK, GREEN, PURPLE, WHITE, BLUE, YELLOW, BLACK, ORANGE ROUND 6: You can trade ANYTHING with ANYONE

36. 1. How is a tariff best described? a. A tax on imports b. Contributing to a favorable balance of trade c. Comparative advantage d. A violation of human rights

37. 2. What does the principle of comparative advantage govern? a. Developed countries b. Multinational corporations c. The United Nations d. International Trade

38. 3. Which organization/ country would matter most when it came to helping out free trade? a. The United Nations b. The United States c. NAFTA d. Canada

39. 4. Which of the following is NOT an example of a trade barrier? a. Tariff b. Quota c. Comparative Advantage d. Embargo

40. 5. How do American Consumers benefit from international trade? a. They have access to goods that are scarce in this country b. They have a trade surplus that increases savings c. They have lower opportunity costs d. They have an absolute advantage in producing some goods

41. 6. Why might Japan impose high tariffs on America automobiles imported into Japan? a. To increase US sales of Japanese cars b. To encourage American auto makers to make better cars c. To increase imports of American cars d. To limit competition in Japan from American cars