ECON 202 Study Guide - Winter 2018, Comprehensive Midterm Notes - International Trade, International Law, Real Wages
12 Oct 2018
School
Department
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ECON 202
MIDTERM EXAM
STUDY GUIDE
Fall 2018
I US, iports largel eeeded eports. The reaso h US as ale to pa for all those iported
goods is eause the oe is supplied large iflos of apital, oe iested foreigers
illig to take a stake i the US Eoo.
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etur trade theor of Daid Riardo
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th etur oetar aalsis of Daid Hue
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Iteratioal eoois uses the sae fudaetal ethods as doesti eoois
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Iteratioal eoois studies issues raised the speial proles of eooi iteratios
etee soereig states
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The gais fro trades
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The patter of trade
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Protetiois
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The alae of paets
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Ehage rate deteriatio
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Iteratioal poli oordiatio
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The iteratioal apital arket
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See thees reur throughout the ourse:
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What Is Iteratioal Eoois Aout?
Questio aout the eefits of tradig for goods that a outr ould produe for itself
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Whe outries sell goods ad series to eah other, there are utual eefits
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Iteratioal trade also allos outries to speialize i produig arroer rages of goods,
giig the greater effiieies of larger
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sale produtio
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Aside fro tagile goods, there are also iteratioal igratio, orroig, ledig, ad
ehages of risk assets suh as stoks ad ods
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Iteratioal trades ill hae strog effets o the distriutio of ioe
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e.g. fishera ho fid the alue of their ath redued iported seafood
Iteratioal trade a adersel affet the oer of resoures that are "speifi" to
idustries that opete ith iports, that is, aot fid alteraties eploet i other
idustries
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Hoeer, partiular groups ithi a atio ould e hurt fro iteratioal trades.
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The Gais fro Trade
We eed patters to eplai h to utilize iteratioal trade
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Cliate the resoures learl eplai h Brazil eports offee ut ost patters are sutle like
h does Japa eports autooiles hile US eports airrafts.
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Eplaied i future hapters
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The Patter of trade
Goerets hae tried either to shield idustries fro foreig opetitio plaig liits o
iports or to help the i orld opetitio susidizig eports
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After WW, US reoed arriers eause the ieed free trade as a fore ot ol for
prosperit ut also to proote orld peae
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North Aeria Free Trade Agreeet NAFTA
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ajor free trade agreeet
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World Trade Orgaizatio
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a ajor free trade agreeet
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Protetioist issue is a iportat sujet i this ook
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Goeret oer the ears deeloped fraeork to help predit the effets of trade poliies like
he to iteree ith ost
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eefit aalsis
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Coflits of iterest ithi atios are usuall ore iportat i deteriig trade poli tha
oflits of iterest etee atios.
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How Muh Trade?
Chapter 1
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Introduction
Jauar , : PM
ECON 231 Page 1
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oflits of iterest etee atios.
Chapter
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shos that trade usuall has er strog effets o ioe distriutio ithi
outries
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Chapter
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reeal that the relatie poer of differet iterest groups ithi outries, rather
tha easure of oerall atioal iterest, is ofte the ai deteriig fator i goeret
poliies toard iteratioal trade
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A outr's alae of paets ust e plaed i the otet of a eooi aalsis to
uderstad hat it eas
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It eerges i a ariet of speifi otets eplored i future hapters
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Balae of Paets
For uh of oder eooi histor, ehage rates ere fied goeret atio rather
tha deteried i the arketplae.
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Eplored i future hapters
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Ehage Rate Deteriatio
I a itegrated orld eoo, oe soereig outr's eooi poliies usuall affet other
outries as ell
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A fudaetal prole i iteratioal eoois is deteriig ho to produt a aeptale
degree of haro aog the iteratioal trade ad oetar poliies of differet outries i
the asee of a orld goeret
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Iteratioal trade poliies hae ee goered a iteratioal treat ko as the
Geeral
Agreeet o Tariffs ad Trade GATT
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Sie , World Trade Orgaizatio efored trade rules
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Eplore i hapter
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Iteratioal Poli Coordiatio
Whe aks i adaed outries let large sus of oe to poorer atios ak i the das,
he the ould't pa ak
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det risis
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These historial lessos rought up the groig iportae of the iteratioal apital arket
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idiiduals ad firs ehage oe o for proises to pa i the future
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The ust ope ith speial regulatios that a outries ipose o foreig iestet
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Soeties offer opportuit to eade regulatios plaed o doesti arkets
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Iteratioal arkets differ fro doesti apital arkets
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Curre flutuatio: if the euro falls agaist the U.S dollar, iestors i U.S ho ought
euro ods suffer a apital loss.
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Iteratioal fiaial likages helped tur the dotur i the U.S housig arket
that had egu i ito a gloal eooi risis
Natioal default: A atio a sipl refuse to pa its dets, ad there a e o effetie
a for its reditors to rig it to ourt
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Risks assoiated ith iteratioal apital arkets
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The Iteratioal Capital Market
Stud of iteratioal trade
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Stud of Iteratioal oe
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The eoois of the Iteratioal eoo a e diided ito to road sufields:
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Iteratioal trade aalsis fouses o the
real
trasatios i the iteratioal eoo
phsial ad tagile goods
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Iteratioal oetar aalsis fouses o the
oetar
side of the iteratioal eoo e.g.
foreig purhases of U.S dollars.
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I the real orld, a't sipl diide the lie etee the to sufields
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Iteratioal Eoois: Trade ad Moe
ECON 231 Page 2
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Document Summary
I(cid:374)ter(cid:374)atio(cid:374)al e(cid:272)o(cid:374)o(cid:373)i(cid:272)s uses the sa(cid:373)e fu(cid:374)da(cid:373)e(cid:374)tal (cid:373)ethods as do(cid:373)esti(cid:272) e(cid:272)o(cid:374)o(cid:373)i(cid:272)s. I(cid:374)ter(cid:374)atio(cid:374)al e(cid:272)o(cid:374)o(cid:373)i(cid:272)s studies issues raised (cid:271)(cid:455) the spe(cid:272)ial pro(cid:271)le(cid:373)s of e(cid:272)o(cid:374)o(cid:373)i(cid:272) i(cid:374)tera(cid:272)tio(cid:374)s (cid:271)et(cid:449)ee(cid:374) so(cid:448)ereig(cid:374) states. Questio(cid:374) a(cid:271)out the (cid:271)e(cid:374)efits of tradi(cid:374)g for goods that a (cid:272)ou(cid:374)tr(cid:455) (cid:272)ould produ(cid:272)e for itself. Whe(cid:374) (cid:272)ou(cid:374)tries sell goods a(cid:374)d ser(cid:448)i(cid:272)es to ea(cid:272)h other, there are (cid:373)utual (cid:271)e(cid:374)efits. I(cid:374)ter(cid:374)atio(cid:374)al trade also allo(cid:449)s (cid:272)ou(cid:374)tries to spe(cid:272)ialize i(cid:374) produ(cid:272)i(cid:374)g (cid:374)arro(cid:449)er ra(cid:374)ges of goods, gi(cid:448)i(cid:374)g the(cid:373) greater effi(cid:272)ie(cid:374)(cid:272)ies of larger-s(cid:272)ale produ(cid:272)tio(cid:374) Aside fro(cid:373) ta(cid:374)gi(cid:271)le goods, there are also i(cid:374)ter(cid:374)atio(cid:374)al (cid:373)igratio(cid:374), (cid:271)orro(cid:449)i(cid:374)g, le(cid:374)di(cid:374)g, a(cid:374)d e(cid:454)(cid:272)ha(cid:374)ges of risk(cid:455) assets su(cid:272)h as sto(cid:272)ks a(cid:374)d (cid:271)o(cid:374)ds. Ho(cid:449)e(cid:448)er, parti(cid:272)ular groups (cid:449)ithi(cid:374) a (cid:374)atio(cid:374) (cid:272)ould (cid:271)e hurt fro(cid:373) i(cid:374)ter(cid:374)atio(cid:374)al trades. I(cid:374)ter(cid:374)atio(cid:374)al trades (cid:449)ill ha(cid:448)e stro(cid:374)g effe(cid:272)ts o(cid:374) the distri(cid:271)utio(cid:374) of i(cid:374)(cid:272)o(cid:373)e. We (cid:374)eed patter(cid:374)s to e(cid:454)plai(cid:374) (cid:449)h(cid:455) to utilize i(cid:374)ter(cid:374)atio(cid:374)al trade. Cli(cid:373)ate the resour(cid:272)es (cid:272)learl(cid:455) e(cid:454)plai(cid:374) (cid:449)h(cid:455) brazil e(cid:454)ports (cid:272)offee (cid:271)ut (cid:373)ost patter(cid:374)s are su(cid:271)tle like (cid:449)h(cid:455) does japa(cid:374) e(cid:454)ports auto(cid:373)o(cid:271)iles (cid:449)hile us e(cid:454)ports air(cid:272)rafts.
