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Imports, Exports, and Exchange Rates - CrCo > .Could The Whole World Use Just One Currency? - EcEx > .22-1-27 Gravitas: Has China rigged the World Trade Organisation? - WION > .Countries' Economies Explained - EcEx >> .
Devaluation Risks - X ..
a. Net exports - the annual difference between a country's exports and imports
b. Trade surplus - when a country exports more than it imports
c. Trade deficit - when a country imports more than it exports
1) International trade
+ It doesn't make sense to make everything on your own if you can trade with other countries that have a comparative advantage.
- Unsafe and unfair working conditions and environmental degradation.
2) NAFTA, 1994
- Dropped trade barriers between Canada, the US and Mexico.
- Increased US trade deficits. Decreased manufacturing jobs.
- Millions of jobs created. Reduced prices. Net positive impact on 3 countries.
3) Protectionism - Placing high tariffs on imports and limiting the number of foreign goods to protect local businesses. Limited by the WTO or World Trade Organization.
a. Exchange rate - how much your currency is worth when you trade it for another country's currency.
b. Currency appreciation - An increase in the value of one currency in terms of another.
c. Currency depreciation - A decrease in the level of a currency in a floating exchange rate system due to market forces. Foreign imports get more expensive, which makes them fall. Exports to other countries get cheaper, which makes them rise.
d. Floating exchange rates - they change based on supply and demand.
e. Balance of payments - accounting statement that records all International transactions in a country. It's made up of two sub-accounts, the current account and the financial account.
f. Current account - records the sale and purchase of goods and services, investment income earned abroad, and other transfers like donations and foreign aid.
g. Financial account - records the purchase and sale of financial assets like stocks and bonds. There is a reason why the flow of goods and the flow of money are symmetric. If consumers, businesses and the government want to buy more stuff than their country is producing symmetrically, they have to import it. So there's a trade deficit.
b. Trade surplus - when a country exports more than it imports
c. Trade deficit - when a country imports more than it exports
1) International trade
+ It doesn't make sense to make everything on your own if you can trade with other countries that have a comparative advantage.
- Unsafe and unfair working conditions and environmental degradation.
2) NAFTA, 1994
- Dropped trade barriers between Canada, the US and Mexico.
- Increased US trade deficits. Decreased manufacturing jobs.
- Millions of jobs created. Reduced prices. Net positive impact on 3 countries.
3) Protectionism - Placing high tariffs on imports and limiting the number of foreign goods to protect local businesses. Limited by the WTO or World Trade Organization.
a. Exchange rate - how much your currency is worth when you trade it for another country's currency.
b. Currency appreciation - An increase in the value of one currency in terms of another.
c. Currency depreciation - A decrease in the level of a currency in a floating exchange rate system due to market forces. Foreign imports get more expensive, which makes them fall. Exports to other countries get cheaper, which makes them rise.
d. Floating exchange rates - they change based on supply and demand.
e. Balance of payments - accounting statement that records all International transactions in a country. It's made up of two sub-accounts, the current account and the financial account.
f. Current account - records the sale and purchase of goods and services, investment income earned abroad, and other transfers like donations and foreign aid.
g. Financial account - records the purchase and sale of financial assets like stocks and bonds. There is a reason why the flow of goods and the flow of money are symmetric. If consumers, businesses and the government want to buy more stuff than their country is producing symmetrically, they have to import it. So there's a trade deficit.
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