GMS 520 Lecture Notes - Lecture 5: Business Cycle
25 Mar 2016
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Document Summary
International trade- econ, socio, political importance increasing lately because of industrialization, improved transportation, diffusion of technology, rise of global corporation. 2 primary reasons countries engage in international trade: countries are different from one another. Can benefit from different strengths, can produce goods efficiently: economies of scale in production producing limited range of goods at larger scale, more efficient than trying to produce everything. Canada: gold and wheat, import cars and electronics we can"t develop economies of scale for these at global level. Most open in trade and mining countries 3rd largest mining supply. Leader in video effects, animation, and video games. Bot difference between total export and total import = 529-524 = b trade surplus. Annual trade surplus is added to gdp, deficit reduced gdp. Prolonged trade deficits have negative effect on long term economy, requires financing by foreigners. Countries we have trade deficits with are countries we owe money to.
