Notes taken during the lecture for Chapter 5 and 6

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30 Jan 2011
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Chapter 5 Part 2 Lecture 6
When a government decides to print a large amount of money, they money itself
loses its value inflation, example: US
China exports a lot to Us, if US $$ goes down, Chinas economy goes down; US owes
China a lot of money; the value of US $$ goes down, it makes it more expensive for
Americans to buy Chinese manufactured goods, hence reducing jobs in Chinese
exporting industry. So China is mad at US for printing lots of bills.
In turn, this is growing US economy, as US$$ value falls, people over the world
would buy Us stuff more, exports from US increase, and therefore jobs will increase
Barriers to Trade:
Competitive Advantage: some countries can make certain products better than
others because they have access to the resources to make it faster cheaper and
easier. Other things that they cant make faster, cheaper and better, they buy it
elsewhere because that choice is cheaper.
Comparative Advantage: Things we make and sell, because we can CHOOSE to do
so. (*Note: The book’s definition of comparative advantage is BULLSHIT according
to the prof*)
Absolute advantage: things that one country makes that other possibly can NOT. So
you have absolute advantage over the other countries. Example: Canada has fresh
water, so we export it to Australia cause they dont have an abundance of fresh water
Most of our exporting money comes from technology, automobiles, maple syrup lol,
and water
Tariffs: when importing from another country the exporting country adds tariffs
which is any kind of fees for being able to buy that product
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