Trade and economic growth

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Trade and economic growth

  1. 1. ● Trade Trade occurs when nations choose to exchange goods. Nations choose to engage in trade because it is impossible or inefficient to produce what they need. Specialization= is when country can produce a good cheaper, better, or more efficiently than others. Can you think of some examples of countries or regions that “specialize” in a particular good or service?
  2. 2. Imports & Exports ● ● Exports are goods that nation produces and sells to other countries. (makes money) Imports are goods that a country buys from other nations (takes money) Why do you think it is important to have a balance a “good” balance of imports and exports?
  3. 3. Trade Barriers ● Trade Barriers are obstacles that make trade more difficult. Trade barriers can be natural or human-produced. Natural Trade Barriers ● Deserts, rainforests, mountains, regions without rivers or oceans. Political Barriers ● Policies or laws passed by a government to regulate trade. Intended to make their economy stronger. – Tariffs – Quotas – Sanctions & Embargoes
  4. 4. Tariffs ● ● ● Tariffs are taxes on imported goods. Tariffs raise prices on foreign goods. Therefore, if a country wants to sell their goods in a country that imposes a tariff they will be charged a tax on that imported product. Why would a country intentionally raise the prices of foreign goods and products?
  5. 5. Quotas ● ● Do you think quotas are a good idea? Quotas are limitations on the number of products that can be imported. The goal of quotas is to make domestic products more competitive with foreign products. How would this occur?
  6. 6. Embargoes & Sanctions ● ● ● Sanctions are policies that restrict a country's trade with another country. Embargoes is a refusal to trade with a certain country at all. These barriers are often unrelated to economics, but rather political disagreements. North Korea sanctions video Cuba embargo video

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