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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

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




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.


Opening Markets Is Creating Wealth imparts value to opinions.


Who should produce what
Who should produce what? imparts value to opinions.

  • 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 Advantage imparts value to opinions.Producing a Meal

Barbie

Ken

Cooking

10 min

40 min

30 min

Cleaning

20 min

30 min

70 min

Totals


Opportunity costs
Opportunity Costs imparts value to opinions.

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? imparts value to opinions.

  • 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
Remember imparts value to opinions.Nations 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 imparts value to opinions.

  • Who Should:

    • Drive the truck ?

    • Load the garbage?

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


Banana size regulations
Banana size regulations imparts value to opinions.


Mexican truck now allowed on us highways
Mexican Truck Now Allowed on US Highways imparts value to opinions.


Nafta
NAFTA imparts value to opinions.


Wto formerly gatt
WTO (formerly GATT) imparts value to opinions.


European monetary union
European Monetary Union imparts value to opinions.


Trade balance
Trade Balance imparts value to opinions.

Imports

Exports


Pierre sells exports bread then what
Pierre Sells (Exports) Bread . . . imparts value to opinions.Then What?


What can pierre do with us
What Can Pierre Do with imparts value to opinions.$$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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