EECS 1520 Lecture Notes - Lecture 17: Berlin Wall, International Trade, Capitalism
21 Jun 2018
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EECS 1520 Lecture 17 Notes
Introduction
Events That Increased Trade Volume
International trade has caused a shift of production to countries that can produce
products more efficiently.
In addition, it ensures more competition among the firms that produce products, which
forces the firms to keep their prices low.
Hence U.S. consumers have more product choices, and at lower prices, as a result of
international trade.
International trade has increased substantially over time, which has strongly affected
multinational corporations.
First, it has enabled some MNCs to obtain materials at lower prices.
Second, it has allowed many MNCs to increase their sales and expand their operations.
The development of international trade is the result of numerous efforts by
governments to remove cross-border restrictions.
Some of the more important historical events that increased trade activity are discussed
next.
Fall of the Berlin Wall
In 1989, the Berlin Wall separating East Germany from West Germany was torn down.
This symbolic event led to improved relations between Eastern Europe and Western
Europe and also encouraged free enterprise in all Eastern European countries and the
privatization of businesses that were owned by the government.
Finally, the Berlin Wall’s removal led to major reductions in trade barriers in Eastern
Europe.
Many MNCs began to export products there, and others capitalized on the cheap labor
costs by importing supplies from that region.
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Document Summary
International trade has caused a shift of production to countries that can produce products more efficiently. Some of the more important historical events that increased trade activity are discussed next. In 1989, the berlin wall separating east germany from west germany was torn down. Many mncs began to export products there, and others capitalized on the cheap labor costs by importing supplies from that region. Trade has caused a shift of production to countries that can produce products more efficiently. In addition, it ensures more competition among the firms that produce products, which forces the firms to keep their prices low. Hence u. s. consumers have more product choices, and at lower prices, as a result of international trade. International trade has increased substantially over time, which has strongly affected multinational corporations. First, it has enabled some mncs to obtain materials at lower prices. Second, it has allowed many mncs to increase their sales and expand their operations.
