Bài giảng MicroEconomics - Chapter 05 The United States in the Global Economy

The United States in the Global EconomyChapter 5 Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinChapter ObjectivesU.S. international tradeComparative advantage, specialization, international tradeExchange ratesGovernment intervention with free international tradeTrade-related topics5-2International LinkagesUnitedStatesEconomyOtherNationalEconomiesGoods & ServicesCapital & LaborInformation & TechnologyMoney5-3World TradeVolume as a percentage of GDPLarger for small countriesLarger for countries with restricted resourcesDependence on world marketLack key resourceSell surplus goods5-4World TradeTrade deficitImports exceed exportsBorrow from foreignersSell real assets to foreignersTrade surplusExports exceed importsLend to foreigners5-5Rapid Trade GrowthTransportation technologyCommunications technologyGeneral decline in tariffsAll nations participate5-6Exports of Goods and Services Percentage of GDP – 2007BelgiumNetherlandsGermanySouth KoreaCanadaItalyFranceNew ZealandSpainUnited KingdomJapanUnited StatesSource: IMF, International Financial Statistics, 200712%91%75%47%45%35%29%27%27%26%25%18%5-7United States TradePercentage of GDP, adjusted for inflation,billions of 2000 dollarsSource: Bureau of Economic AnalysisPercentage of GDPImportsExports5-8U.S. Imports and Exports Billions of dollars, 2007ChemicalsConsumer DurablesAgricultural ProductsSemiconductorsComputersGenerating EquipmentAutomobilesAircraftMedical EquipmentFuels and LubricantsPetroleumAutomobilesHousehold AppliancesComputersMetalsClothingConsumer ElectronicsGenerating EquipmentChemicalsAircraftExportsImportsSource: Department of Commerce Data$94.170.977.650.242.941.543.648.632.047.7$331.0133.8112.1104.0115.786.394.755.056.234.45-9U.S. Imports and ExportsGoods by area – 2007CanadaEuropean UnionMexicoChinaJapanOPEC countriesAll otherTOTALCanadaEuropean UnionMexicoChinaJapanOPEC countriesAll otherTOTALExports toImports fromSource: Survey of Current Business, April 2006ValueValue$250 242 136 65 61 49 346$1149$317 356 214 322 146 174 436$1965Imports Exceed Exports by $816 Billion5-10Exports of GoodsSource: World Trade OrganizationGermanyUnited StatesChinaJapanFranceNetherlandsItalyUnited KingdomCanadaBelgiumSouth KoreaMexicoRussiaTaiwanSingapore0 100 200 300 400 500 600 700 800 900 $912$819$593$566$449$358$349$347$317$307$254$189$184$183$180Billions of dollars, 20065-11SpecializationShift resources to export industryAchieve higher overall output and incomeAbsolute advantageHigher output per worker for a goodComparative advantageLower domestic opportunity cost for a good5-12Comparative AdvantageProduct A B C D EAvocados 0 20 24 40 60Soybeans 15 10 9 5 0Sacrifice 5 tons soybeans for 20 tons avocadosCosts 1 ton soybeans to produce 4 tons avocadosMexico’s Production Possibilities Table (in Tons)Production Alternatives5-13Comparative AdvantageAvocados 0 30 33 60 90Soybeans 30 20 19 10 0Absolute advantage in both goodsSacrifice 10 tons soybeans for 30 tons avocadosCosts 1 ton soybeans to produce 3 tons avocadosProduct A B C D EU.S.’s Production Possibilities Table (in Tons)Production Alternatives5-14Comparative AdvantageMexico will produce avocadosU.S. will produce soybeansU.S. gives up 3 A for 1 SMexico gains 4 A for 1 STerms of trade3.5 A for 1 SBoth countries benefit 5-15Comparative AdvantageGains from tradeMexico starts at C (24 A and 9S)Move to E (60 A and 0 S)Trade 35 A for 10 SU.S. starts at T (33 A and 19 S)Move to R (0 A and 30 S)Trade 10 S for 35 AOverall gains?5-16Exchange RatesOne U.S. dollar will buy39.17 Indian rupees.51 British pounds1.01 Canadian dollars10.94 Mexican pesos1.12 Swiss francs.68 European euro109.87 Japanese yen937.38 South Korean won6.42 Swedish kronorsJanuary 20085-17The Foreign Exchange MarketDollar – Yen MarketPQQuantity of yenDollar price of 1 yen.01QeDySyExchange Rate:$.01=¥15-18Changing Exchange RatesShifts in demand for currencyShifts in supply of currencyRise in dollar price of yenDollar depreciatesCurrency appreciation5-19Trade BarriersProtective tariffsImport quotasNontariff barriersExport subsidies5-20Reasons for Trade BarriersMisunderstanding gains from tradePolitical considerationsCosts to society5-21Government and TradeTrade WarsLong history of U.S. tariffsSmoot-Hawley Tariff Act of 1930Reciprocal Trade Agreements Act of 1934Reduce tariffsNegotiating AuthorityMost-Favored-Nation Clause5-22Multilateral Trade AgreementsGeneral Agreement on Tariffs and Trade (GATT)Equal trade treatmentReduction in tariffsElimination of import quotasUruguay Round 19955-23Multilateral Trade AgreementsWorld Trade Organization (WTO)Successor to GATT151 nations belongDoha Round (Doha, Qatar)Trade negotiationLatest round 20015-24Free Trade ZonesEuropean Union (EU)Established 1958The euro zoneNorth American Free Trade Agreement (NAFTA)Established 1993Canada, Mexico, and U.S.5-25Top Globalized EconomiesSource: A. T. Kearney, Foreign Policy1-Singapore2-Hong Kong3-Netherlands4-Switzerland5-Ireland6-Denmark7-United States8-Canada9-Jordan10-Estonia11-Sweden12-United Kingdom2007, based on 13 key indicators 5-26Trade-Related IssuesTrade adjustment assistanceOffshoring of jobsOutsourcingBenefits and costsFair-trade productsThe purpose5-27Key Termsmultinational corporationscomparative advantageterms of tradeforeign exchange marketexchange ratesdepreciationappreciationprotective tariffsimport quotasnontariff barriersexport subsidiesSmoot-Hawley Tariff ActReciprocal Trade Agreements Act most-favored-nation clausesGeneral Agreement on Tariffs and Trade (GATT)World Trade Organization (WTO)Doha RoundEuropean Union (EU)trade bloceuroNorth American Free Trade Agreement (NAFTA)5-28Next Chapter PreviewElasticity, Consumer Surplus, and Producer Surplus5-29