[EC239] - Midterm Exam Guide - Comprehensive Notes for the exam (14 pages long!)
Document Summary
Intro: jeff chan jchan@wlu. ca, lh 3016, office hours: International trade has roughly tripled in importance compared to the economy as a whole in the past 50 years. Both imports and exports fell in 2009 due to the recession. Gains from trade: countries selling goods and services to each other almost always generates mutual benefits, when a buyer and a seller engage in a voluntary transaction, both can be made better off. Norwegian consumers import oranges that they would have a hard time producing: how could a country that is the most (least) efficient producer of everything gain from trade. Countries use finite resources to produce what they are most productive at (compared to their other production choices), then trade those products for goods and services that they want to consume. Trade is predicted to benefit countries as a whole in several ways, but trade may harm particular groups within a country.
