Homework 6

[Aisling Winston]

Homework 6 is due at 12pm on March 8, 2013.

1. (6 points) Why do countries choose to trade?  What are some of the benefits of trade?  What are some of the drawbacks?
2. (4 points) Does international trade affect developed and developing countries differently?  Why and/or how?
3. (2 points) How might international trade alleviate poverty and unemployment?
4. (2 points) How might international trade cause poverty and unemployment?
5. (6 points) Should the US increase or decrease international trade?  Why?  With whom should the US increase and/or decrease trade?  Why?
   

[cjackem]

Countries choose to trade because exportable goods and precious goods are usually dependent on region/Geography and because of the scarcity elsewhere the demand is greater. Ie the return is much greater.

The benefits of trade are that the country who is exporting will experience a financial gain and therefore strengthen the region. Also the overabundance of certain things and the scarcity of other things will drive trade harder.

The drawbacks of trade are that the country doing the importing will usually be exploited in some form. In America's case, we are completely dependent on foreign food and goods. This is evident whenever you visit a grocery store. What is even more surprising is that a bag of grapes grown thousands of miles away is actually cheaper than one grown in the next state. If there was any kind of fuel shortage we would not be able to feed ourselves. Even McDonalds grows its beef in another hemisphere. Also diseases can be easily transmitted through trade-( the Black Plague )

 Dependent on other factors, trade will help the exporting country and help and hurt the importer. On the one hand, the importer will have the good they desire, but they will usually be up charged and there is shipping fees to boot. If the exporting country is “developing” (aka surviving off the charity of a more prosperous nation) They will most likely just be undermined. For instance, China has been sending thousands of workers to their new oil rigs in Africa. Though there are many people there the Chinese refuse to hire local help. This situation is almost theft to me but supposedly the tax benefits are enough for them.

International trade would alleviate poverty and unemployment depending on what your country can export. A country that uses most of its land for beef would be useless to some countries, as well as pork. One of the biggest cash crops is marijuana but some governments deem it socially unacceptable, so criminals benefit from it. There are too many factors that contribute to the success or fail but as a rule of thumb exporting is good and importing is less desirable.

. In my opinion it is about time to become the independent country we once were. There are waay too many goods being imported and not enough exports ( except maybe....Corn of all things ?). Grapes from Chile should not be cheaper than our own grapes. The fact that they are is one symptom of a collapse. It really doesnt matter what we do to our trade system because we have way, way too many other problems stacking up every day. Nothing about our system is sustainable and in some cases downright backwards. If we were to have to trade less I would say we should start leaving the middle east alone. After all I don't think they like us too much... I believe we need to start having our own food produced here. But little by little we are expanding our consumer base while pushing our farmers further out in order to put in a new suburb, Walmart, etc. (of which most products are made overseas and of which most of its employees are from overseas )

[Kendall Lynnette]

Kendall Williams

Aisling Winston

ECN 400

March 8, 2013

 

Homework Six

            1. Countries choose to trade for multiple reasons. More often than not, they do so because, on their own, they cannot provide the resources they need to sustain a healthy economy. They also do so to save money. For example, many companies that are based in the United States outsource to other countries for their goods because they can purchase them at a much lower cost. Finally, they choose to trade in order to make a profit. If one country has a resource that another country needs, the first can charge the second whatever price it sees fit, resulting in a major profit for its economy.

            There are several advantages to trading. First, it encourages countries to specialize in certain products and services, allowing them to produce them more efficiently at a lower opportunity cost. Second, it allows the countries that do specialize in products and services to produce them in larger quantities, resulting in even more profit for large-scale economies. Third, it increases the competition in markets and leads to lower prices on goods and services worldwide, benefiting consumers by giving them more purchasing power. Fourth, it makes it much more difficult for companies to form monopolies in one area of the market because they must compete with foreign companies. Fifth, it leads to higher quality goods and services because the higher level of competition forces technology to advance and innovation to occur on a daily basis. Finally, it results in a higher employment rate by creating jobs in the export sector of the economy.

            There are also a few drawbacks to trading. First, it could lead to over-specialization in the market. For example, if the demand falls in a certain area, those employed in that sector will most likely experience a job loss because people no longer need or want their specialty goods or services. Also, trade makes in much harder for small businesses to survive because many times there are more established foreign companies that are already in control of the field in which they are trying to be successful. Finally, it may lead to a less diverse market due to the demise of local producers. If foreign companies saturate the market with much cheaper goods, local companies will go out of business, resulting in a less diverse market.

            2. International trade does affect developed and developing countries in both similar and different ways. For instance, both developed and developing countries benefit from international trade in the case of necessity of natural resources. Some smaller developing countries in Africa have access to oil and precious metals, resources that are needed by many larger developed countries. The developed country benefits by receiving those resources, and the developing country benefits by receiving financial payment for those resources. It also affects these countries in different ways in some cases. For example, developing countries often outsource the manufacturing sector developing countries in Asia, and most of these smaller countries have few laws on labor, resulting in lower payment to employees and higher poverty rate for the developing country but more profit and lower cost for the for the developed country.

            3. International trade can alleviate poverty and unemployment by creating jobs. When companies decide to establish import and export sectors in their businesses, jobs are created instantly. If more countries trade, more jobs are available to the active labor force.

            4. International trade can also cause poverty and unemployment. For instance, if a country outsources more often than not, local businesses are forced to shut down. When countries outsource too often, the local market suffers greatly and leads to a high unemployment rate in that country.

            5. I believe the United States is in a position where it should decrease its international trade with many Middle Eastern and Asian countries. We have the resources that those countries provide—oil, clothing, and many other household goods—and by manufacturing them in our own country, we can sell those goods and resources to our citizens for a much lower price and create more jobs for the unemployed, hopefully leading to a much healthier economy overall.

            I believe we should decrease international trade with the Middle Eastern and Asian countries for several reasons. First, we should cut back on what we trade with the Middle Eastern countries because relations with them have been strained for many years now. By trading with them, we are funding their efforts to harm our own country. I also believe we should cut back on trade with many Asian countries because of their lax labor laws. If they are not paying their employees correct wages and are using child labor to produce our products, they do not deserve our business. Hopefully, this would lead to stricter labor laws in those countries and would end the tension between the Middle Eastern countries and our own. 

 

Works Cited

"Why Do Countries Trade?" Economics Online, 2013. Web. 03/07/2013.

"What Is the Impact of International Trade?" Wise Geek, 2013. Web. 03/07/2013.

Winston, Aisling. "Lecture Notes." 2013. 03/07/2013.

[Mike Donatacci]

1.  Countries trade because they can either purchase something cheaper than what they can get it for in their own country or things they can't get in their country.  The benefits are that you can purchase things you can't get locally, sell things you can't sell locally, and improve relationships with other countries.

One drawback is  that sometimes you can put people in your own country out of work if you choose to buy cheaper goods from another country.    Another is dependence on another country.  The U.S. is dependent on other countries for fuel.  The selling countries take advantage of that and raise prices.  The buying countries are forced to pay the higher prices because they need the goods.

2.  International trade really helps developing countries.  Developing countries can sell goods from their country and really boost the economy.  More money helps them develop further.  It helps developed countries because they can purchase products or raw supplies from other countries that they either can't get or that costs too much in their own country.

3.  International trade can alleviate poverty and unemployment.  Examples are goods produced from underdeveloped and developing countries bring money in that the people couldn't get any other way other than direct aid from other countries.  Places like Ten Thousand Villages sell products from those countries.  The U.S. started outsourcing call centers and IT to India.  India has developed many areas where business people would go, but hasn't really helped the majority of people who have horrible living conditions.

4.  International trade is causing poverty and unemployment in the U.S.  Manufacturing employees have lost their jobs because those jobs are outsourced to Asia.  The manufacturing workers aren't skilled for other jobs, so they face unemployment.  Some programs allow them to go to school to learn new skills, but it is still hard for them to get jobs, especially at the salary they used to earn.  

5.  The U.S. should decrease trade that costs American jobs.  They could offer tax incentives to companies that come back and hire American workers.  The workers would have money to spend that would boost the economy and wouldn't need to rely on unemployment.   The government would save on unemployment costs and could also collect tax from the U.S. workers.  The U.S. should increase trade with countries where they could get raw materials and things the U.S. needs that we don't have and can't produce here. 

Mike Donatacci

[kryan]

1. Countries choose to trade in order to aquire goods and services that they themselves cannot provide. Some of the benefits of trade is that it encourages communication with other countries and allows countries to make a profit on exporting their goods. One of the drawbacks is that you may not be able to produce enough of your good to supply to yourself.

 

2. International trade does affect developed and developing countries differently in that trading with a developed country, you are helping boost an already stable trade economy that has the ability to produce enough to trade. When you trade with a developing country you are dealing with trade that is just beginning to be regulated and is possibly unstable.

 

3. International trade may alleviate poverty and unemployment by creating more jobs in the factories to produce the goods that are traded.

 

4. International trade may CAUSE poverty and unemployment if the goods being produced are being produced in another country and shiped back to the U.S. company to be sold here. Because the business wants to cut costs as much as possible to make a bigger profit, they will definately use oversea labor for production as opposed to hiring people that live here and actually paying them a decent salary.

 

5. The U.S. should maintain a healthy balanced amount of international trade in order to keep good relations with other countries as well as to keep some jobs over here. If the U.S. were to increase trade with another country it should be a country with that is not as developed but has resources that the U.S. needs and decrease trade with countries who produce the same goods we do or decrease trade with countries that we are in political conflict with.

[MorganA]

1. Why Countries Trade:

       -To Save and Make more money

       -They don't specialize in the production of a good

       -Other Countries do specialize in the production of a needed good

    Benefits:

       -Make more money 

       -More of a "better" good

    Drawbacks:

       -Dependent on other countries

       -Countries can use trade to "hurt" other countries when upset

2. Yes and No. They can both benefit by getting a needed good but the developing countries can benefit even more because they were at the bottom to begin with.

3. Increase in demand for a good = More JOBS in that area

4. If the demand decreases so will the need to produce it

5. I think they should decrease trade with China because I'm tired of seeing "made in china" on everything. I think we should become more independent and less dependent on huge countries. I think they should increase trade with developing countries to help them out and create allies for the future.

[DWILLIAMS]

1. Countries trade because different places have access to different things. This could be a bad thing sometimes and also this could be a good thing.
 A good thing that can happen from trading is that the country could get a resource and start making a lot of money off of the product that they make using that resource.
A potentially bad thing that can happen is that a after the trading process, the product may not work out as good as it was thought out to.

2. Yes, international trade may not be as much as a burden on developed countries as it may be on undeveloped countries. To trade internationally, it takes some experienced with trading and also some backbone/support.
 This process is going to cost money even tho it is a plan to make money. With that being said, the developing country may have more of a struggle.

3. International trade may help out poverty and unemployment if the resource that the country is getting is worth something. There is a possibility that whatever is obtained by the country could be the biggest money maker the country has ever seen. This will make room for more jobs and people will have more of an opportunity to make money.

4. As for a developing country, trading internationally could damage the economy. Since it is going to cost money to complete the trade, that is money that has to be spent. After trading, if what the country has obtained from the other country isn't working, no money will be made.

5.  I don't think the U.S. should decrease on international trade. I say this because i believe America has a lot of smart people and if there is a resource out there that can make money then the move to get it should be made. I do however think that if the U.S. would increase trade with China, we would have some different ways of making money available.
Trade has helped and bruised America so it would be a "straddle the fence" type situation when it comes to deciding whether or not America should increase/decrease trade.

[Jonathan Gibson]

1. To me countries trade because we lack in something and the person we are trading with lacks in something as well. We have something they need and they have something we need. Some benefits of trading include but are not limited to; making a lager long term net profit, gaining a more diverse cultural background, and the increase of competition over a particular product helps both sides.
The drawback of trade lay mostly along the lines of the US giving more for a particular thing we desperately need.
2. International trade definitely affects developed and developing countries, but to me its mostly to the same affect. By trading internationally, not only does it promote an off shore country and product it also allows for profit while doing so. This is also how dedicated costumers are formed. For example when they see a Japanese commercial for Toshiba, they'll think man that was a great laptop, then they will keep using that company's laptops until it can no longer do what it is they need or until another company does it better.
3. Poverty and unemployment will be alleviated when more international trade is done. With more international trade comes the need to expand. And when there is a need to expand, more people will be need to be efficient in the work force. And when people are needed more jobs will be posted resulting in those that want to work, will. But the bottom line is poverty and unemployment will only change for the person that wants it to.
4. International trade can and will cause poverty and unemployment to go up when we no longer need another country's help. Less work will need to be done because we won't be trading, which will result in needing less people.
5. I say the US should increase international trade. I feel we could still learn more about other country's and be more culturally aware. I like the way the Japanese do things just because they know how to be very resourceful and reuse what they have. This allows everything they have to be used to maximum potential and we would learn to not be as wasteful as we have proven to be.

[darienM]

DMurphy

1. One reason countries choose to trade with one another is to get goods and supplies without having to make them. Countries most always trade to get goods and services for a cheaper price then it would cost to manufacture them. Another reason a country may trade is to obtain goods that they may not have access to or cannot provide on their own. 

Some drawbacks to trading with other countries are the taxes and tariffs that are placed on traded goods. Countries will tax traded goods and try to make a profit off of them.

2. I believe that internationally trade most definitely affects a country, whether it is developed or undeveloped. When trading with another country you are most likely trying to obtain goods that you cannot or choose not to produce for a reason. If that reason is because its to expensive to produced, that country may benefit by trading and getting it for a lower. more affordable price. If the problem is resources, or a scarce supply, then that country can obtain those goods without having to make them or use limited supplies. 

International trade can help countries grow and help stimulate their economy by providing access to the goods and services needed in that economy.

3. When countries trade internationally they are trying to obtain goods and supply's for a lower cost then it is to manufacturer them. Trading risk taking away jobs and opportunities from willing and able workers.

4. In many countries miners and factory workers and among the most important jobs in that economy. When countries trade international  they may be able to purchase the same goods and materials for cheaper then it cost to pay those miners and factory workers to produce them. This situation can cause many people to lose their jobs, raising the unemployment rate of that country, and causing homelessness and poverty.

5. In my opinion, i think the unites states should stop international trade as much only to bring more jobs and opportunities to the many unemployed people we have in this country. If we started to produce more of our own goods and supply's we would be able to purchase things for cheaper, as well as provide many hard working american's with the jobs and wages they deserve. I think that one reason why goods and technologies are so expensive is because we pay other countries to produce things that we could be making ourselves.

[jpotts]

1. Countries trade because even though we could produce something we want/need in our own country we can get it easier and cheaper from another country, like certain types of fruit that need a more tropical climate to grow. Some advantages of trade are cheaper products, it can increase exports and add revenue to the GDP. Some drawbacks would be people may choose to purchase foreign products over domestic products, and can deport jobs to other nations.

2. Both countries can benefit from trade by getting things that they need but with developing countries you have to worry about outsourcing. 

3. International trade can help alleviate poverty because the more trading the more jobs that become available to people.

4. Outsourcing to often can create companies to have to shut down causing a loss of jobs.

5. I think we should decrease international trade because it seems that we have become to reliant on others. We should decrease trade with Chine because it seems that most of the things I look at come from there, it is very rare i can find something that was made in this country and i think that is sad.

[David]

 1. Why do countries choose to trade? What are some of the benefits of trade? What are some of

the drawbacks (3 paragraphs)?

 

2. Does international trade affect developed and developing countries differently? Why and/or how?

International trade can be both a great and a terrible thing depending on which country you are and what good or service is being examined. If you are a developing country and then international trade can be an amazing way to boost your economy. On the other hand you run the risk of becoming to reliant on your trade with other countries you risk losing a lot should those countries stop trading with you. Developed countries benefit from international trade as well by being able to receive goods for cheap prices they are able to lower the prices of goods in that country and improve the quality of life for its citizens. The down side is that the developing countries take jobs away from your country when trading and can leave your citizens out in the cold.

3. How might international trade alleviate poverty and unemployment (1 paragraph)?

International trade can alleviate poverty and unemployment in a developing country by providing workers with a brand new sector of work to participate in. when a country is able to undercut another for a good or service or becomes the de-facto standard for a good or service than that industry goes into a boom and starts and can start a mass hiring frenzy. The newfound jobs can significantly improve their quality of life and financials.

4. How might international trade cause poverty and unemployment (1 paragraph)?

International trade can cause poverty and unemployment as a consequence to one product becoming available for cheaper than a previously bought from manufacturing country. When one country undercuts another country for a good or service than the floor of that industry falls out from beneath those companies and workers leaving them proficient at a job that doesn’t exist or is too hard to maintain anymore.

5. Should the US increase or decrease international trade? Why? With whom should the US increase and decrease trade? Why (2 paragraphs)?

The United States should decrease trade with other countries temporarily to promote more jobs within the country and revenue being built from those jobs in order to pay off its ridiculously large debt. By continuing to trade we may be keeping goods prices lower but we are choking the lifeblood of the country out of it by putting people out of work.

The United States should decrease its trade with china in order to promote its own manufacturing being that china is the largest manufacturer of goods. It will simultaneously put people back to work here in the United States and it would also help to lower our debt to china by increasing the amount of taxes the government can collect from it’s citizens. Coupled with other actions the debt to china could be taken care of and the united states could be free of china’s grasp. 

[AsiaFri]

Asia Frierson

Homework 4

1.       Countries trade mainly for resources (capacity to satisfy their own needs and wants), and for personal profit. By exploiting their domestic scarce resources, countries can produce a surplus, and trade for the resources they need. International trade is at the heart of the global economy and is responsible for much of the development and prosperity of the modern industrialized world.

 

The benefit of trade is a country getting the resources it needs from other countries, and trading their own resources to another country can also bring profit. Trade increases competition and lowers world prices, which provides benefits to consumers by raising the purchasing power of their own income, and leads a rise in consumer surplus. Trading also breaks down domestic monopolies, which face competition from more efficient foreign firms.

The drawbacks of trading are over-specialization; with workers at risk of losing their jobs should world demand fall or when goods for domestic consumption can be produced more cheaply abroad. Jobs lost through such changes cause severe structural unemployment. Plus certain industries do not get a chance to grow because they face competition from more established foreign firms.

 

2.       International trade does have some affects to the development of a country. There are many benefits and drawbacks to international trade, like a countries growth and development heavily depends on international trade.

 Japan is a good example, as they do not produce their own oil, but is the world’s fourth largest consumer of oil. Some developed countries are losing locally produced produces because of finding international trade cheaper (and sometimes easier) than getting it in their own markets.

 

3.       Opening up an economy to international trade increases the income of that country. Whether trade liberalization increases long-term economic growth and more open countries achieve higher growth than other countries is more disputed in the literature. A company called NORAD is developing a trade strategy towards developing countries. The overall results seem to suggest that developing countries as a group will benefit from liberalization but that those benefits will be uneven. If poverty reduction is the main goal, trade policy cannot be a main vehicle for improving the situation of the poor.

 

4.       There is awareness that some countries who lose from trade might be the poorest members of society, who have fewer assets to draw on to protect themselves during hard times, and are thus less able to absorb adjustment costs, than their fellow citizens.

Poverty is normally caused through trade by changing the prices of tradable goods and improving access to new products; changing the relative wages of skilled and unskilled labor and the cost of capital, thereby affecting the employment of the poor; changing incentives for investment and innovation and affecting economic growth.

 

5.       I thing trading in the US should stay the way it is, we have our own resources and produces to use, but we do benefits from the produces of other countries. The main reason the US trades is the fact that it’s cheaper than paying for the development of their own produce.

 If we needed to trade with a country it should be with China, India, and Japan. These three countries have the resources and produce that the US often use and/or sometimes need. Although trading has its ups and downs it’s a major part of are global economy.

 

Citations- http://www.economicsonline.co.uk/Global_economics/Why_do_countries_trade.html

    http://www.cmi.no/publications/publication/?2937=will-international-trade-reduce-poverty

                    http://www.imf.org/external/pubs/ft/fandd/2001/12/banniste.htm

[Isaac Evans]

Isaac Evans

Aisling Winston

Civics and Economics

 

 

1. Countries choose to trade with other countries due to the possible benefits that come from trade. If comparative advantage is done correctly then countries benefit from low cost of production and high import rates. Trading with other countries might create an economic upturn for countries as well. By engaging in trade countries can acquire goods that they would be unable to produce themselves.  Goods that would cost an arm and a leg to produce can be purchased from another country for a cheaper price. Trade with other countries can weaken a country if they trade too much. By trading too much a country’s economy can become dependent on trade and be unable to support itself. If that particular country were to lose all of its business in trade the economy will collapse. Trade can also take away work from businesses in a country. If a country is able to pay less for a good that they get from another country they won’t bother to produce it on their own shores causing business to either slow down or close.
2. I think it does and doesn’t because international trade effects each country pretty much the same, but if your country isn’t exporting trades then your economy is going to hurt because of that and in some countries it means a little because they are doing better in other areas, but for some it means a lot, and drives countries into high poverty levels

3.  In a poverty stricken country trade might alleviate poverty by stimulating the economy. By producing more products for little money and then selling the product for a high price. Consumers will get more money which will be put back into the economy and help end poverty. It also can stimulate the economy for non-poverty stricken countries as well.
4.  Trade can create poverty by reducing the amount of jobs a country has available. By reducing the need for businesses to create product by relying on trade businesses shut down and jobs will be lost. The people who lose their jobs will fall into poverty from lack of work.
5. Currently I think the US should increase its trade when it comes to the amount where exporting. The more product we make and ship, the more money we will make and be able to put back into the economy. I think the US should stop trade with any country that imposes a ridiculous amount of trade barriers. International trade might increase unemployment through the effect trade has on businesses.

 

 

http://www.albany.edu/history/HIS530/Immigrationsincethe1870s/immigration.html

[Julian]

Country’s trade because they don’t have all of the recourses to make all of the things that a country needs like Food, metals, etc.  Also if a country specializes in  exporting one thing that creates a comparative advantage, so that country can produce at a low price.  The downside of trade is that, your country is loosing possible jobs that could employ people.

 

International trade effects developing country’s because they are more dependent because they are new and they can not support them own self’s. Developed countries depend less on other countries but still do for certain items that they cannot produce in their own country.

 

International trade it creates jobs for products already being made in the country such as a Farmer hiring field workers or labor

 

International trade outsources the majority of the jobs, therefore where the product is manufactured, the job market is affected negatively because the jobs were sent else where.

 

If the US increases international trade it will drive the prices of products lower, and in turn increase the dependency of foreign products. If the US decreases international trade we would end up shooting ourselves in the foot, because our economy would tank itself. All the prices of everything outsourced would rise and in turn cause the economy to go into fault. But in the long run, it would greatly lessen our debt. The US should decrease trade with China but in the end everything will go up in price a few dollars, but a lot of jobs would come back inside of the United States and employment would go down because we’ve been making our own product.