The document discusses international trade and economic development. It covers key topics like a country's export partners and imports, trade balances, advantages in trade, outsourcing, tariffs and quotas, as well as challenges facing developing countries. Developed countries generally have higher GDP while less developed countries have lower GDP and face obstacles to growth such as rapid population growth and low savings rates.

1. Chapter 15 International Trade and Economic Development

2. International Trade Exports – goods produced in a country and sold to residents in a foreign country US Export Partners: Canada 23.4%, Mexico 13.3%, Japan 6.1%, China 4.6%, UK 4.3% Imports – goods produced in foreign countries and purchased in another country

3. Where our imports come from…

4. Trade Balance Balance of Trade – the difference between the value of a countries exports and the value of their imports Balance of Trade = value of exports – value of imports

5. International Trade Lingo Absolute Advantage – the situation in which a country can produce more of a good than another country with the same quantity of resources Specialize – To do only one thing. For example, when a country specializes in the production of a good, it produces only that good. Comparative Advantage – The situation in which a country can produce a good at a lower cost than another country.

6. Outsourcing Outsourcing – the term used to describe work done for a company by another company or by people other than the original company’s employees Cost – jobs are lost Benefits – cheaper consumer products The costs are easier to see than the benefits

7. Tariffs and Quotas Tariff – a tax on imports Quota – legal limit on the amount of a good that may be imported Tariffs and quotas raise the price of imported goods to the U.S. consumer

8. Economic Development Developed Country – a country with a relatively high GDP Less – Developed Country – a country with a relatively low GDP

9. Problems and Needs of the Developing World Obstacles to Economic Development: Rapid population growth Low savings rate – people are to poor to save money Cultural differences may inhibit change Political instability Factors that aid growth and development: Free trade Foreign investment Low government intervention in wage a price controls