PSYC 290 Lecture Notes - Lecture 5: New Trade Theory, Canadian Content, Absolute Advantage

• School: Athabasca University
• Department: Psychology
• Course: PSYC 290
• Professor: Dr .pe

Document Summary

Chapters 5 & 6 international trade: evaluate some advantages, disadvantages, and criticisms of international trade (textbook, p. 140; International trade displaces local industries and can threaten the local way of life. environmental policies: explain the main concepts, principal assumptions, and limitations of the following trade theories: (textbook, pp. 146 156: mercantalism: trade theory that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports. The practice of mercantilism rested upon three essential pillars: trade surpluses, government intervention, and colonialism. The main problem with mercantilism is that, if all nations were to barricade their markets from imports and push their exports onto others, international trade would be severely restricted. In fact, trade in all nonessential goods would likely cease altogether. In addition, paying colonies little for their exports but charging them high prices for their imports impaired their economic development.