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Would Americans be better off if we purchased less from foreigners?

Would Americans be better off if we purchased less from foreigners? . International Trade . In what ways do you engage in trade? . Specialization. What do you plan to specialize in? . Milton Friedman—The story of a pencil. The Basis for all Trade: Absolute and Comparative Advantage.

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Would Americans be better off if we purchased less from foreigners?

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  1. Would Americans be better off if we purchased less from foreigners?

  2. International Trade • In what ways do you engage in trade?

  3. Specialization • What do you plan to specialize in?

  4. Milton Friedman—The story of a pencil

  5. The Basis for all Trade:Absolute and Comparative Advantage KarateEconomics

  6. Absolute Advantage • When a country can produce a good more efficiently than another country

  7. Comparative Advantage Before Trade • The ability to produce a product relatively more efficiently, aka, a lower opportunity cost After Trade

  8. History of American Trade • Smoot-Hawley Tariff Act—1930 • Raised tariffs on 20,000 imported goods • Result: huge decline in standard of living across all trading groups

  9. History of American Trade • WWII and after—promotion of free trade • NE—Wheelan: why would we put sanctions on ourselves?

  10. NAFTA

  11. NAFTA • Signed in 1994 by Clinton—created a trade bloc between US, Canada, and Mexico

  12. Protectionism • Tariffs • Quotas • Regulations

  13. Why Protectionism? • Protect domestic industries and employment • Strategic/National interest goals • Political pressure • Protect culture

  14. Neo-colonialism?Mexico Bribery Scandal

  15. Fair Trade? • International trade with a focus on quality of life and a more equitable global economic trading system • Top 5 Worst Sweatshop Offenders

  16. Alex Tabarrok--Economic Growth

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