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Please explain how trade and investment affect economic and social development. Provide an example of a country that had economic and social development from trade and investment. Also, provide an example of a country that receives little to no trade and/or investment and is economically less developed.

Explain and discuss the Theory of Absolute Advantage. How does it differ from the Theory of Comparative Advantage? You may pattern it from your text or other sources, but you are required to make up your own example to show understanding. Please be sure to cite your sources.

Does it make sense for the Gilley family (or any family) to strive to only “buy American”?

Why should managers regularly monitor the BOP of the country in which their business operates? Use the US and China as an example for your response.

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Mahe Alam
Mahe AlamLv10
28 Sep 2019

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Related questions

10) Explain the connection between the US trade deficit and financial capital flows.

14) Suppose Laborville has 100 workers and 200 machines while Sleepyville has 20 workers and 80 machines. Which country is labor abundant? How do you know?

15) Using the data from #16, suppose that each country produces both nachos and cell phones. If 1 worker and 1 machine is required to produce phones but 2 workers and ½ of a machine is required to produce nachos, which country will specialize in the production of phones and which in nachos if the countries open to free international trade?

16) Explain the difference between absolute and comparative advantage.

17) Explain why a trade deficit provides advantages to a country. Is it always advantageous? 18) Explain how comparative advantage determines the pattern of trade. Use an example to aid in your explanation.

19) Explain how factor abundance can explain the pattern of trade.

20) Explain why international trade is not a zero-sum game.

In this module, we have learned that the trade balance, interest rates, and exchange rates are all related in an economic and fiscal policy. For decades, the United States and China have traded products through imports and exports, and for the most part, China is able to produce items at a lesser cost than the United States. Americans love a good value, but they also want quality. China, on the other hand, has grown dramatically and continued with “industrializing” the country, which has cost the government billions of dollars. Throughout this course, we will investigate the ongoing trade between these two countries, the costs of multinational companies that expand or complete business through the import and export exchange, and how the ongoing practice may create economic changes and instability for the individual organization.

Research the balance of trade in the United States and China and relate how historical changes in exchange and interest rates have affected imports and exports between the two countries.

Specifically address the following:

Explain how trade balance, interest rates, and exchange rates are related, and cite an example of how a rise or fall in one changes the others.

Does a deficit in China or the United States change the overall advantage or disadvantage of trade? Why?

Explore how the cost and quantity of imports and exports, such as electronic equipment, may be challenged by the rise and fall of these rates.

Incorporate the fluctuations of supply and demand into the costs incurred and decide ways management calculates estimations for further product needs.

Explain the philosophy of “international crowding out,” citing an example of how this may occur, and describe how excessive borrowing in one country has affected interest rates in the United States.

As an example, China and the United States “borrow” from each other to finance needs by purchasing government-backed securities from the other country. This practice provides one country with additional funds and also gives the purchasing country more control over interest rates or “borrowing costs” in the future. How does this influence interest rates in the domestic country and foreign country? Can one country gain control over another financially by continually financing another country’s debt?

1. Explain how income and substitution affect savings decisions in opposing ways. Provide an example to support your argument with detail and integrating the concept of marginal propensity to consumer and marginal propensity to save. Make sure to reply to at least one other student.

2. Explain what is meant by game theory and how it can help us understand strategic behavior; also how it relates to international trade and comparative advantage--be sure to include an example. Make sure to reply to at least one other student.

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