comparing economies international trade an interdependent world

Comparing EconomiesComparing Economies

International TradeInternational Trade

An Interdependent WorldAn Interdependent World


International TradeInternational TradeNo country produces No country produces everything it needs to everything it needs to survivesurviveinternational international tradingtradingTrading helps county’s deal Trading helps county’s deal with problem of scarcitywith problem of scarcityCountries trade b/c they Countries trade b/c they have have comparative comparative advantageadvantage ability of a ability of a country to produce a good at country to produce a good at a lower cost than another a lower cost than another countrycountry


Gov’t restricts some international tradeGov’t restricts some international trade “home” countries lose money“home” countries lose money– TariffTariff tax on imported goods tax on imported goods

QuotaQuotalimits on amount of good allowed limits on amount of good allowed


Trade AgreementsTrade Agreements

Most countries aim for free tradeMost countries aim for free trade reduce trade reduce trade barriersbarriers

Many countries create free trade zonesMany countries create free trade zones– European UnionEuropean Union: organization of Euro nations: organization of Euro nations– NAFTANAFTA: North American Free Trade Agreement (US, : North American Free Trade Agreement (US,

Can, Mex)Can, Mex)– The World Trade OrganizationThe World Trade Organization: oversee trade : oversee trade

among nationsamong nations


Economic SystemsEconomic Systems

Not all economic Not all economic systems are alikesystems are alike– Market EconomyMarket Economy: :

Private citizens own Private citizens own the factors of the factors of productionproduction

Individual freedom Individual freedom (what, how, for whom)(what, how, for whom)

CompetitionCompetition

Higher GDPHigher GDP


Command EconomyCommand Economy: Individuals have little : Individuals have little influence on economic systeminfluence on economic system– Major economic decisions are made by gov’tMajor economic decisions are made by gov’t– Socialism:Socialism: means of production owned by means of production owned by

societysociety– Communism:Communism: Karl MarxKarl Marx believed socialism believed socialism

would evolve into communismwould evolve into communism one social one social class, common property, no gov’tclass, common property, no gov’t

– Gov’t ControlGov’t Control– Slow growthSlow growth


– Mixed EconomyMixed Economy: Individuals are free, but : Individuals are free, but follow gov’t regulationfollow gov’t regulation

Free enterprise is combined with gov’t decisionsFree enterprise is combined with gov’t decisions

Gov’t acts as consumer and businessGov’t acts as consumer and business


Economies in TransitionEconomies in TransitionSome countries are trying Some countries are trying to convert from a to convert from a command economy to a command economy to a mixed, or market, mixed, or market, economyeconomy– China, RussiaChina, Russia

Some countries are Some countries are considered to be considered to be developingdeveloping because they because they are trying to start a are trying to start a market based economy market based economy from scratchfrom scratch traditionaltraditional

Interdependent WorldInterdependent World

An Interdependent WorldAn Interdependent World

Ppl/countries all over world depend on Ppl/countries all over world depend on each other for goods/serviceseach other for goods/services

US relies on massive imports of fuel from US relies on massive imports of fuel from other nationsother nations

We sell wheat, computers, machineryWe sell wheat, computers, machinery


Global IssuesGlobal Issues– Growing problem is economic Growing problem is economic inequalityinequality

among nationsamong nations 35 rich; 165 poor 35 rich; 165 poor– Most poor nations have Most poor nations have traditional traditional

economies, but are considered economies, but are considered developingdeveloping nations because they are trying to nations because they are trying to industrializeindustrialize

– Environmental destructionEnvironmental destruction acid rain, acid rain, increase conservationincrease conservation

– Drug trafficking, millions of Drug trafficking, millions of refugeesrefugees, , terrorismterrorism


The United Nations- 1944The United Nations- 1944InternationalismInternationalism countries should come countries should come together to promote common aimstogether to promote common aimsUnited Nations goalsUnited Nations goals– Maintain international peaceMaintain international peace– develop friendly relations among countriesdevelop friendly relations among countries– promote justice and cooperationpromote justice and cooperation– seek solutions to global problemsseek solutions to global problems

UN often contributes peacekeeping soldiers to UN often contributes peacekeeping soldiers to war torn countrieswar torn countries


Human RightsHuman Rights

Basic freedoms that all ppl. should enjoyBasic freedoms that all ppl. should enjoy safety, food, sheltersafety, food, shelter

Many countries violate ppl. for speaking Many countries violate ppl. for speaking personal opinions- China, Cuba, Sudanpersonal opinions- China, Cuba, Sudan

Universal Declaration of Human RightsUniversal Declaration of Human Rights– 1948- Protection of rights, raise standard of 1948- Protection of rights, raise standard of

livingliving


UN security council holds UN security council holds tribunalstribunals (courts) to hear cases about violations of (courts) to hear cases about violations of human rightshuman rights

Tribunals hear cases about Tribunals hear cases about genocidegenocide mass killing of group of ppl (Darfur, mass killing of group of ppl (Darfur, Sudan)Sudan)

UN encourages spread of democracy and UN encourages spread of democracy and human rightshuman rights US foreign policy US foreign policy


South AfricaSouth Africa– ApartheidApartheid racial racial

separation between separation between white and blackwhite and black

– UN and EU ordered UN and EU ordered economic economic sanctionssanctions(punishment(punishment) against South Africa) against South Africa

– 1994-1994-Nelson MandelaNelson Mandela became 1st AA became 1st AA presidentpresident


Cold WarCold War– Years following WWII, Joseph Stalin, of Years following WWII, Joseph Stalin, of

Russia, forced surrounding countries to Russia, forced surrounding countries to become become satellitessatellites

– World divided between Communism (SU) and World divided between Communism (SU) and Democracy (US)Democracy (US)

– 1989- Communism ends in Russia1989- Communism ends in Russia

comparing economies international trade an interdependent world

Documents

trade barriersmany countries

internationalism countries

transitionsome countries

sheltermany countries

russiasome countries

free trade zoneseuropean

developing nations

alikemarket economy