module 8 Discussion Question
tmlllett2
CHAPTER17-2.pptECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
WHAT’S AHEAD
17.1 The Nature of International Trade
17.2 U.S. Economy and World Trade
17.3 Government and the Economy
17.4 It’s a Global Economy
Economic Education for Consumers
Economic Education for Consumers
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Chapter 17
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Chapter 17
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
LESSON 17.1
The Nature of International Trade
GOALS
Discuss why nations trade goods and services.
Describe ways that nations limit or promote international trade.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
KEY TERMS
import
export
trade deficit
trade surplus
balance of trade
absolute advantage
comparative advantage
tariff
quota
protectionism
North American Free Trade Agreement (NAFTA)
European Union (EU)
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
What Is International Trade
Import
Export
Balance of trade
Trade deficit
Trade surplus
Absolute advantage
Comparative advantage
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
Trade Barriers and Agreements
Tariffs
Quotas
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
Why Nations Create
Trade Barriers
To help young industries
To support national security
To protect jobs
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
Trade Agreements
World Trade Organization
North American Free Trade Agreement (NAFTA)
European Union (EU)
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
What is international trade? Why do nations trade?
How do countries limit and promote international trade?
How do you distinguish between absolute advantage and comparative advantage?
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
What is international trade? Why do nations trade?
International trade is the buying and selling of goods and services among nations.
Nations trade because they benefit from trade.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
How do countries limit and promote international trade?
Free trade is limited by tariffs and quotas.
It is promoted when countries lower tariffs and quotas or form trading blocks such as NAFTA or the EU.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
What is the difference between comparative advantage and absolute advantage?
Absolute advantage is a country’s ability to produce a particular good more efficiently than another country.
Comparative advantage is a country’s ability to produce a good with a lower opportunity cost than another country.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
LESSON 17.2
U.S. Economy and World Trade
GOALS
Describe how international trade affects the U.S. economy.
Explain how exchange rates affect the prices of imports and exports.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
KEY TERMS
exchange rate
floating exchange rate
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
Trade and U.S. Consumers
U.S. imports
U.S. exports
Trade in services
The trade debate
© 2010 South-Western, Cengage Learning
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
U.S. Imports
Consumer goods
Oil and petroleum products
Motor vehicles
Electronic products
© 2010 South-Western, Cengage Learning
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
U.S. Exports
Motor vehicles and parts
Electronic products
Airplanes and airplane parts
Agricultural products
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
Exchange Rates
How exchange rates are determined
Effects of floating exchange rates
Exchange rates and the U.S. economy
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
How does international trade affect the lives of U.S. consumers?
How do floating exchange rates affect international trade?
What is the difference between absolute advantage and comparative advantage?
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
How does international trade affect the lives of U.S. consumers?
International trade enables U.S. consumers to buy a wider selection of products at lower prices.
U.S. workers often need to be retrained because U.S. companies may move their production of goods to other countries where it is cheaper to make products, but service and information exports are still predominant in the United States.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
How do floating exchange rates affect international trade?
Floating exchange rates determine the amount of a foreign currency you obtain for your dollars and thus the prices of imported goods you buy and exported goods U.S. businesses sell.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
LESSON 17.3
Government and the Economy
GOALS
Discuss ways that governments measure their economies.
Describe how the government can help reduce swings in the business cycle.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
KEY TERMS
gross domestic product (GDP)
real GDP
Consumer Price Index (CPI)
unemployment rate
business cycle
expansion
recession
depression
fiscal policy
monetary policy
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
Measuring
Economic Performance
Gross domestic product (GDP)
Inflation
Unemployment rate
Personal income
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
The Business Cycle
Expansion
Recession
Consumer confidence
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
Government Efforts to
Stabilize the Economy
Fiscal policy
Monetary policy
The special case in 2008
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
How does the government measure economic activity?
What can governments do to help influence economic growth?
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
How does the government measure economic activity?
The government measures economic activity by determining and comparing measurements such as the gross domestic product (GDP), the rate of inflation, and the Consumer Price Index.
It also looks at the unemployment rate and growth of personal income.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
What can governments do to help influence economic growth?
Governments can create fiscal and monetary policies that affect the growth or decline of their country’s economy.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
LESSON 17.4
It’s a Global Economy
GOALS
Describe ways that companies do business in the global marketplace.
Discuss ways that nations depend on each other.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
KEY TERM
multinational corporation (MNC)
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
Business in a Global Economy
Multinational corporations (MNC)
Employment
Technology
Other ways to enter foreign markets
Licensing
Partnerships
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
Sharing Resources
International flow of funds
International flow of knowledge
The global environment
The spread of prosperity
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
What are some ways that companies do business in other countries?
What are some ways that nations work together to promote prosperity in the global economy?
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
What are some ways that companies do business in other countries?
Forming multinational corporations
Creating licensing agreements
Forming partnerships
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 17
What are some ways that nations work together to promote prosperity in the global economy?
Making trade agreements that reduce tariffs and quotas
Making international investments
Sharing resources such as new technologies
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
