Economics 221 Lecture 4: Test 4
22 Dec 2018
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Don"t want to give up your wealth via trade. Adam smith, 1776 in the wealth of nations. Both countries (parties) can benefit from trade. Specialize in what you"re the low-cost producer. Mutually-advantageous trade possible under more circumstances than just absolute advantage. Key: specialized in what you"re relatively good at. You can only bring in so much. Protect companies in emerging high tech industries from competition so they may become the world leader. Formerly called the general agreement on tariffs and trade (gatt) Trade agreements reducing barriers to trade negotiated in rounds (from a round of talks) Safety rules and regional trade deals allowed. Chance of a bad event causing a financial hit, take out insurance. Pay a guaranteed small amount to avoid the chance of a big loss. If you die during that period you heirs get the insurance. If you don"t die during the period, they get nothing. Comp and collision to protect the car.
