Take-Home Final Exam Juniata College EB 223 01 EB105: Int’l Economic Issues You must answer these questions: 1) Pick any two topics from this course that the public at large and economists have different opinions of. Why does this difference of opinion exist? Now describe any international economic topic covered in class that you think was glossed over, ignored or not paid sufficient attention to by the readings or by me. What are my profession (and me) missing? One topic that the general population and economists view differently is globalization. The general population tends to view globalization as a bad thing, but economists favor globalization. According to LeGrain, there are two main reasons that the general population fear globalization. …show more content…
The general population, see free trade as a potential threat to domestic workers and a dependency on other countries for goods and services. Economists however, see free trade as an essential tool for a country to increase capital. Economists feel that everyone mutually benefits from free trade, because countries can specialize in goods and services that they have abundant resources for and import goods and services that they cannot make as efficiently domestically. This is also known as comparative advantage. Economists and the general population disagree on this topic, because the general population wants to buy domestically and support domestic workers instead of rely on other nations for goods and services. Economists however, know that producing everything domestically would be very cost ineffective and nearly …show more content…
It is important to understand the global trade markets and to be able to engage in economic discourse. This course is an introductory course to international economic issues that emphasizes the importance of international trade to global economy. A main key point that we learned from this course is that free trade mutually benefits everyone. Another key take away from this course is that globalization is the ties that bind countries of the world together not only economically, but also politically and culturally (LeGrain, 2002, p.
The trend toward a more globalized market has become increasingly developed in the latter half of the 20th century. Emphasis on world trade has become a dominant figure in almost every Nation’s economy. Between 1970 and 2000 world trade has experienced an increase of almost 370 percent. Concurrently, world GDP increased by 150 percent. Trade is beneficial to Nations because it allows the creation of avenues that aid in efficient allocation of resources (Canas & Coronado). Countries can gain from trade when they specialize according to their comparative advantage. This is, when they create conditions where goods and services can be produced at a lower opportunity cost than in any other country. Along the same logic, countries can also make large profits by taking advantage of another countries comparative advantage.
...ystem primarily responsible for promoting global competition. Free trade also promotes shifts in production so as to fit the “comparative advantage” model. Though free trade is widely practiced concerns with how to regulate free trade, something supposedly unregulated, countries have to subject themselves to the controversial institutions of the IMF and WTO. Fair trade policies while potentially creating smaller markets support workers’ rights in both the U.S. and developing nations. Though the pros and cons of globalization continue to be debated the United States can no longer escape its role in the global economy nor can it impose policies that are detrimental to the United States founding ideals. However policies that play towards the advantages of both free and fair trade could stimulate a healthy domestic economy that is also competitive in the global market.
The world has changed a lot due to globalization. Now the well-being and prosperity of countries and nations is highly dependent on healthy international trade and investment relationships. The key factor underlying this prosperity is their openness to the global economy. While the global market is becoming increasingly integrated, it is important for the European Union and Canada to succeed in all areas of global commerce.
Globalization, on the whole, is a good thing. Globalization greatly empowers consumers, enables unprecedented market knowledge, and has pioneered breakthroughs in logistics. However, globalization can act as a detriment as well, to both underdeveloped and developed nations alike. Although free trade is an amiable goal, the realities of unrestricted trade must be evaluated and planned for. This paper will evaluate those realities through the economics of globa...
While free trade has certainly changed with advances in technology and the ability to create external economies, the concept seems to be the most benign way for countries to trade with one another. Factoring in that imperfect competition and increasing returns challenge the concept of comparative advantage in modern international trade markets, the resulting introduction of government policies to regulate trade seems to result in increased tensions between countries as individual nations seek to gain advantages at the cost of others. While classical trade optimism may be somewhat naïve, the alternatives are risky and potentially harmful.
What is free trade? Free trade is “international trade left to its natural course without tariffs, quotas, or other restrictions.” As of right now the United States and China are guilty of not trading freely; however, most of the blame could be put on the United States for putting tariffs on certain products that come from China. For many years free trade has been scrutinized on whether it is actually beneficial to the economy or harmful to the economy. Many economists have different views on free trade and some big controversies have come from the arguments they have made to each other. A few of the reasons free trade is beneficial are that it helps the economy grow and prosper as well as improves the lives of everyone and also helps producers create their products at low costs. Honestly, I feel that we should support free trade because there are a lot more benefits than people actually think. In this essay, I will be arguing why free trade is really beneficial and almost vital to having a good economy.
It is very important that developing countries, share in the growth and expansion that international trade can bring to them. The W.T.O. agreement recognizes the importance of how international trade can boost the economics of third world countries. In the recent economic crisis that affected us on a global scale the decline of exports in developing was smaller than those of developed country. Not all countries do or are able to participate equally in international trade because they may suffer from political and/or economic uncertainties. Asia and the US are leaders among the import/export trade while Africa, Latin America and the Middle East are minor contributors in the world trade
Globalization perpetuates economic interdependence between countries. Through the increasing volume of goods and services transferred across borders, globalization has created international capital flow and boosted the rapid diffusion of technology. According to Dr. Ismail Shariff, “globalization is the worldwide process of homogenizing prices, products, wages, rates of interest and profit.” Three forces control the manner by which globalization furthers developments. These factors include the role of human migration, international trade, and integration of financial markets. By discussing the pros and cons of globalization, a correlation between these factors reveal the intertwined web known as world trade.
International trade is very important in the world’s economy, but are all the outcomes of this process positive? International trade can affect many economic rituals in a way that can be good, or it could cause disaster. I am going to discuss the outcomes of international trade and what positive and negatives come with this procedure.
The trend towards global trade liberalisation began in the 19th century, when reductions in transport and communication costs spurred trade. This continued through the Second World War (WWII), when economic agreements, such as Bretton Woods and The General Agreement on Tariffs and Trade (GATT), were formed in its aftermath which included the liberalisation of capital and goods markets and the reduction in tariffs. From 1947 to 1967, GATT negotiations reduced tariffs on all dutiab...
David Ricardo was a leading economist in the 1800s. Ricardo was a leading advocate of free trade. Adam Smith was also an advocate of free trade. Smith was more confident than Ricardo that the ability of a market economy's potential could benefit society. (Carbaugh, 2009). Ricardo felt that a countries government should not meddle in free trade and could hinder free trade instead of help it. Ricardo's theory of comparative advantage has been used by economists for years. The law of comparative advantage states that the citizens of each nation can gain by spending more of their time and resources doing those things in which they have a relative advantage (Carbaugh, 2009, p12). What this means is that one needs to determine whether the production of a goods or service is done more economically either domestically or abroad. Even if one country has the advantage in all situations, both countries can still benefit. The theory states that the less efficient nation should specialize in and e...
Shaikh, A. (2007). Globalization and the myths of free trade : history, theory, and empirical evidence . London: Routledge.
2. Globalization and international trade, capital and production (Augustin Kwasi Fosu, 2010) (Gunter and Van der Hoeven,
In order for international trade to work well, governments must allow the world market to determine how goods are sold, manufactured and traded for all to economically prosper. While all nations may have the capability to produce any goods or services needed by their population, it is not possible for all nations to have a comparative advantage for producing a good due to natural resources of the country or other available resources needed to produce a good or service. The example of trading among states comprising the United States is an example of how free trade works best without the interve...
Globalization has a tremendous amount of support as well as a tremendous amount of opposition. While multinational companies tend to push for globalization and therefore higher profit margins, opponents work hard to make sure that developing nations are not taken advantage of in the process. Globalization cannot continue without supporters and it should not continue with out detractors. As always a balance must be found to protect not only the nations that are developing but those that are already developed as well. Proponents and opponents must work together to ensure the well being of generations to come that will surely inherit the earth.