Exploration of Issues While Using Economic Concepts and Statistical Data TRADE Regional Trade - Trade within countries, eg Dairy Products from Waikato International Trade - Trade between countries, eg Gold from South Africa Onshore services - a service provided for foreigners in New Zealand by a New Zealand owned business. (Such as tourism in New Zealand) Offshore services - when a New Zealand firm provides a service outside our country. (Such as insurance) Free trade is when the purchase and sale of goods and services across international borders can occur without intervention by either government. Protectionism - Trade barriers used to prevent domestic producers from international competition. Types of Protectionism [IMAGE] Ones that decrease Imports Ones that increase Exports Tariffs Quotas Bans Subsidies Marketing Tax Boards Incentives Regulations Embargoes Tariffs: Is a tax on imports that increase the price of the imported products and it less competitive that locally produced items. Quotas: Set a limit on how much an imported commodity will be allowed into the country. Bans: Products which are not allowed to be imported into a country, eg drugs, material from endangered species, flick knives etc. Regulations: Normally relate to health, safety, cultural and environmental factors. Embargo: Is where a country refuses to trade with another country, eg many countries did not trade with Iraq after the gulf war of 1991. Trade is important to New Zealand because it is a small country and cannot provide the resources to satisfy all our needs and wants, therefore we must import vital goods in order to survive. To generate income to import we export certain commodities. Magnitudes and Patterns of Trade * Exchange Rates and TWI (the price of the money needed to trade) * The Terms of Trade (indexes showing what we can be bought with what we earn) * The Balance of Payment - the Current Account, the Capital Account
i. The economy is said to be ‘booming’ when demands for certain products and services rise. When demand rises, the prices will also increase. Increase in price can boost up the company’s profit. This enables companies to hire more workers thus increasing the numbers of employments. The increase in company’s profit also allows employers to raise the employees’ wages. When companies have more workers, they would be able to produce more products. Overtime, these outputs will then be sold to the people with jobs at a higher price because of the scarce amount of resources available.
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.
Trade, of course, is only part of a larger network of relationships between our two countries. This network evolves in response to many complex influences, and exporters need to consider how our two countries' ever-expanding, ever-changing relationships will affect their activities. To take just a few examples:
The systems of political and socio-economical value are some of the most important when it comes to countries survival. The countries in today’s world, some prefer to be as involved and as cooperative globally as others, while others prefer to stay to itself and prefer to be as away and as uninvolved to the global efforts as possible. The terms for these as explained would be globalization, Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process is driven by international trade and investment and aided by information technology, and protectionism, protectionism is the economic policy of restraining trade between states (countries) through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations. The two policies both have their own pros and cons, but in the end, globalization is the best choice to go
One of the main factors that caused globalisation in Australia was a reduction in protection, the act of National trade barriers being removed. A reduction in protection of international trade is done by governments who work together to develop agreements with each other to reduce trade barriers and allow tariffs on imported goods to be reduced. Australian governments have been involved with countries such as Singapore and Malaysia in an effort to help reduce the tariffs and quotas on imported goods, resulting in free trade agreements between other countries. For example, when National trade barriers are removed, opportunities are opened up to Australian business to import goods at a cheaper price and then export other goods to new markets in other countries. Evidence of this was recently reported on the ABC news program, the reporter quoted that ‘our government should not sign any free trade agreements with Japan, until the tariffs on Australian beef and dairy products are reduced.’ This news report showed local Australian farmers who are trying to convince our Prime Minist...
The change in health profiles of the population and the evolution of medical technology have made more explicit the gap between what medicine can do and what is economically feasible (Fuchs, 2000). Resources to satisfy needs are scarce and every society must decide how better to allocate the scarce resource among the different alternative uses. Economics tries to address the normative question of which allocation of resources is best for the society. The answer to such question depends crucially on the objective being pursued. When comparing different alternatives, under the classical assumptions of competitive markets (the Arrow-Debreu economy) and Pareto efficiency, a reallocation is said to be efficient if no one in the economy is made worse off and at least one individual is better off. However, such definition is very restrictive in at least two senses: first, it is not concerned with distributional issues and ignores any equity implications (a reallocation of resources that gives more money to the richest person, without taking anything from others, is efficient, despite the greater inequity such decision generates) and it doesn’t allows to judge reallocation of resources where there are some gainers and losers, because utility is neither interpersonally comparable nor cardinally measurable.
Australia’s limited restrictions on the goods and services imported make it an extremely open market. The nation is an active member in many trade forums which include, the World Trade
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.
Few governments will argue that the exchange of goods and services across international borders is a bad thing. However, the degree to which an international trading system is open may come into contest with a state’s ability to protect its interests. Free trade is often portrayed in a good light, with focus placed on the material benefits. Theoretically, free trade enables a distribution of resources across state lines. A country’s workforce may become more productive as it specializes in products that it has a comparative advantage. Free trade minimizes the chance that a market will have a surplus of one product and not enough of another. Arguably, comparative specialization leads to efficiency and growth.
In pondering what I could write these economic stories about, I referred to text in the book “How to Think Like an Economist”, with in this book Mr. Arnold had a great revelation that caught my attention. That of the question “can there ever be too little of a bad thing?” (Arnold, 2005), this tidbit of information got me to think just in everyday life, is it possible to want what to monopolize happiness so much that the bad in life can destroy you. In reflecting upon various life situations and relationships I found that the influences of economic principles where everywhere and in order to monopolize life you have to notice the principles and theories.
Economics Define unemployment? Provide an example of the three types of unemployment. Which type of unemployment is most problematic and why? What type of unemployment problem(s) does the U.S. currently have and why? What is a possible solution to the unemployment problem(s)?
The purpose of this report is to analyse the structure and pattern of Australia's trade. The report uses trade statistics from 1999-2000 to 2003-04 and theoretical perspectives to help explain the pattern of trade. The focus will begin with the balance of payments in relation to exports and imports, then move on to the determinants of the terms of trade, and finally, an analysis of why Australia's trade pattern is as it is.
International trade is an economic practice where countries can import and export goods with no concerns to government intervention which includes tariffs and import/export bans or limitations. International trade has several advantages on developing countries; who are nations with low levels of economic resources or low standard of living. Developing countries can advance their economy through strategic free trade agreements. Free trade generally improves the quality of life of poor nations. Nations can import goods that are not easily available within their borders; importing goods may be cheaper for than trying to produce consumer goods. Many developing nations do not have the production procedures available for translating raw materials into valuable goods.
Free trade is a policy that relies on the concept of comparative advantage that when comparing two countries one of those countries will have the capability to make a product that is better than the other country. So it is best if each country focuses its efforts and resources into one product to increase the economic activity for both countries. The determination of who produces a product better is based on the open market without intervention from a government who may try to control a trade by imposing government protective measures such as tariffs. The World Trade Organization has been tasked with monitoring free trade, but it has been noted that their policing has not been effective to stop such interventions. Free trade not only relies on a laissez-faire approach but also on assumptions of conditions. The assumptions used by many for economic theories are not always accurate but rather the justification for using the assumptions is so that economic theories can be applied for the greater good of an economy.
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...