Economics for leaders
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Economics for Leaders. Lesson 10: International Markets. Countries don’t trade . People Do !. Voluntary Trade Creates Wealth - ALWAYS. International trade. National trade. Regional trade. Local trade. Balance of Payments. Current Account. Capital account. Goods & Services.

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Economics for Leaders

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Economics for leaders

Economics for Leaders

Lesson 10:

International Markets


Countries don t trade

Countries don’t trade

People

Do !


Voluntary trade creates wealth always

Voluntary Trade Creates Wealth - ALWAYS

International trade

National trade

Regional trade

Local trade


Balance of payments

Balance of Payments

Current

Account

Capital account

Goods &

Services

Financial flows


Economics for leaders

  • Please use the slides before this one in your presentation.

  • The slides following this one are provided as options.


Fundamentally the same decision

Fundamentally the same decision


Erp 5 understanding based on knowledge and evidence imparts value to opinions

ERP-5: Understanding based on knowledge and evidence imparts value to opinions.

Opinions matter and are of equal value at the ballot box. But on matters of rational deliberation the value of an opinion is determined by the knowledge and evidence on which it is based. Statements of opinion should initiate the quest for economic understanding, not end it.

Economic Reasoning Principle #5:

Understanding based on knowledge and

evidence imparts value to opinions.


Economics for leaders

Opening Markets Is Creating Wealth


Who should produce what

Who should produce what?

  • The Law of Comparative Advantage

    • Through specialization and exchange, both parties can gain from lower costs and greater output – even if one party does both things better.

What is your lowest opportunity cost alternative?


Comparative advantage producing a meal

Comparative AdvantageProducing a Meal

Barbie

Ken

Cooking

10 min

40 min

30 min

Cleaning

20 min

30 min

70 min

Totals


Opportunity costs

Opportunity Costs

Barbie

Ken

1/2 cleaning

4/3 cleaning

Cooking

Cleaning

2/1 cooking

3/4 cooking


What will ken barbie do

What Will Ken & Barbie Do?

  • Working Independently

    • Barbie Produces a Meal in 30 Minutes

    • Ken Produces a Meal in 70 Minutes

  • Barbie Has An Absolute Advantage

  • Would Barbie Produce Two Meals?

  • With Trade/Cooperation

    • Barbie Spends 20 Minutes Cooking

    • Ken Spends 60 Minutes Cleaning

    • They Both Gain!


Remember nations are not different

RememberNations Are Not Different

  • Goods are Produced at Least Cost When People Specialize According to the Principle of Comparative Advantage

  • Lesson - Don’t Try to Do Everything; It is Not Efficient

  • Trade Between Countries Creates Wealth

  • Examples

    • Ken and Barbie Have Time for Other Activities


Zeke and zac

Zeke and Zac

  • Who Should:

    • Drive the truck ?

    • Load the garbage?

What if – Zac doesn’t have a drivers license?


Banana size regulations

Banana size regulations


Mexican truck now allowed on us highways

Mexican Truck Now Allowed on US Highways


Nafta

NAFTA


Wto formerly gatt

WTO (formerly GATT)


European monetary union

European Monetary Union


Trade balance

Trade Balance

Imports

Exports


Pierre sells exports bread then what

Pierre Sells (Exports) Bread . . . Then What?


What can pierre do with us

What Can Pierre Do with $$US?

Take his Cheri to his favorite bistro at the Eiffel Tower?

Mais NON!

Buy U.S goods & services

OR

U.S. assets ?

Oui! Oui!


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