Term
According to the video on the devaluation of the dollar, why are people concerned about the falling value of the dollar? |
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Definition
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Purchasing Power Parity-the long-run exchange rates should move towards rates that would equalize the prices of an indentical basket of goods and services -losing profits due to falling value of US $ -The dollar buys less -Restructuring production lines and moving ppl's jobs overseas
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Term
How does the US trade deficit contribute to the depreciation of the dollar? |
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Definition
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-Foreign imports become more expensive -US buys more from Europe than Europe from US resulting in the demand for US dollar falls -US goods have become very cheap
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Term
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Definition
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-A process for identifying unfair trade practices and intiating negotiations designed to eliminate such practices under the threat of retalitory action *Significant in Kodak/Fuji case because WTO does not deal with anticompetitive business practices -Agressive unilateralism:describes instances where the US would unilaterally determine what unfair practices existed and then unilaterally decide what concessions are necessary to redress the situation
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Term
What are non-tariff barriers? |
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Definition
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Obstacles to trade, not anchored by laws and official regulations and not transparent
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Term
Non-tariff barriers Administrative barriers |
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Definition
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-block the entry of products -labeling is an example of this
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Term
Non-tariff barriers Production Subsidies |
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Definition
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-Incentives for domestic manufacturers
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Term
Non-tariff barriers Technical Standards |
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Definition
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-Provisions made by govt. agencies -For example, safety, pollution, technical performace
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Term
What are the basic ideas of absolute advantage? |
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Definition
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-lassiez faire: freedom of enterprise and commerce -a nations imports should consist of goods made more efficiently abroad while exports should consist of goods made more efficiently at home -market would reach an efficient level by itself
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Term
What are the basic ideas of comparative advantage theory? |
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Definition
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-both countries would gain from trade even if one were efficient in all goods -it was the comparative advantage that determined intl trade flows
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Term
What is the basic message of the article "shaking up trade"? |
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Definition
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-trade isn't always good for the US -the US no longer has the comparative advantage
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Term
If white-collar jobs are sent overseas, what are the three ways it could disrupt the US economy? |
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Definition
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-high-skill wage drops -companies take all *benefits of increased trade goes mainly to the employers -a blow to GDP growth
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