ECONOMICS
Chapter 1:
ECONOMIC INTERDEPENDENCE.- “ When the U.S sneezes, the economies of other nations catch a cold”
GLOBALIZATION . Is the process of greater interdependence among countries and their citizens.
Agglomeration Economies.- are a powerful force that help explain the advantages of the "clustering effect" of many activities ranging from retailing to transport terminals. (Urbanization, Industrialization, Localization economies)
FOREIGN OUTSOURCING.- Certain aspects of a product’s manufacture that are performed in more than one country.
The United States as an Open Economy: The US economy has become increasaingly integrated into the world economy.
Trade of goods and services , Financial markets , Labor force, Ownership of production facilities, Dependence on imported materials
Trade Patterns: As a rough of measure of the importance of international trade in a nation´s economy, we can look at the nation´s exports and imports as a percentage of its GDP. This ratio is known as opennes.
OPENNES= (Exports+ Imports) / GDP
Why is Globalization Important?: According to the law of comparative advantage, the citizens of each nation can gain by spending more of their time and resources doing those things in which they have a relative advantage.
Globalization increased competition from abroad: Economist recognize that globalization and free trade can provide benefits to many firms, workers, and consumers.
Common Fallacies of International Trade: 1. That trade is zero-seem activity – if one trading party gains the other must lose.
2. That imports reduce employment and act as a drag on the economy, while exports promote growth and employment.
3. Often people feel that tariffs, quotas, and other import restrictions will save jobs and promote a higher level of employment.
Does Free Trade Apply to cigarettes?: The free trade with cigarettes can cause more smoking disease and death. The World Health Organization contend that the benefits of free trade
ECONOMIC INTERDEPENDENCE.- “ When the U.S sneezes, the economies of other nations catch a cold”
GLOBALIZATION . Is the process of greater interdependence among countries and their citizens.
Agglomeration Economies.- are a powerful force that help explain the advantages of the "clustering effect" of many activities ranging from retailing to transport terminals. (Urbanization, Industrialization, Localization economies)
FOREIGN OUTSOURCING.- Certain aspects of a product’s manufacture that are performed in more than one country.
The United States as an Open Economy: The US economy has become increasaingly integrated into the world economy.
Trade of goods and services , Financial markets , Labor force, Ownership of production facilities, Dependence on imported materials
Trade Patterns: As a rough of measure of the importance of international trade in a nation´s economy, we can look at the nation´s exports and imports as a percentage of its GDP. This ratio is known as opennes.
OPENNES= (Exports+ Imports) / GDP
Why is Globalization Important?: According to the law of comparative advantage, the citizens of each nation can gain by spending more of their time and resources doing those things in which they have a relative advantage.
Globalization increased competition from abroad: Economist recognize that globalization and free trade can provide benefits to many firms, workers, and consumers.
Common Fallacies of International Trade: 1. That trade is zero-seem activity – if one trading party gains the other must lose.
2. That imports reduce employment and act as a drag on the economy, while exports promote growth and employment.
3. Often people feel that tariffs, quotas, and other import restrictions will save jobs and promote a higher level of employment.
Does Free Trade Apply to cigarettes?: The free trade with cigarettes can cause more smoking disease and death. The World Health Organization contend that the benefits of free trade