International Economics summary 2024/25

International Economics generally false - "Trade is generally harmful if there are large disparities between countries in wages." has been a major preoccupation of international economics. - Who sells what to whom... David Ricardo - The insight that patterns of trade are primarily determined by international differences in labor productivity was first proposed by: removing barriers to international trade - After WWII, the US has pursed a broad policy of... the US has run huge trade deficits in every state since 1982 - The balance of payments has become a central issue for the US b/c: an acceptable degree of harmony among the international trade - A fundamental problem in international economics is how to produce... GATT - For the 70 years preceding 1994, international trade policies have been governed by the: a set of arrangements by which individuals and firms exchange money now for promises to pay in the future - The international capital market is: the risk of exchange rate fluctuations - International capital markets experience a kind of risk not faced in domestic capital markets, namely: WTO - Since 1994, trade rules have been enforced by most international trade involves monetary transactions - The distinction between international trade and international money is not entirely clear because Intra-European trade exceeds international trade by the European Union - The gravity model offers a logical explanation for the fact that trade between Sweden and Germany exceeds that between Sweden and Spain - The gravity model explains why the distance between them - According to the gravity model, a characteristic that tends to affect the probability of trade existing between any two countries is linguistic/cultural affinity, historical ties, larger economies, mutual membership in preferential trade agreements - 4 things that increase trade between 2 countries gravity model - The two neighbors of the US do a lot more trade with the US than European economies of equal size. increased - Since WWII, the likelihood that the job of a new college graduate wil be directly or indirectly affect by world trade: decreased - Since WWII, the relative importance of raw materials, including oil, in total world trade: manufactured goods - In the present, most of the exports from China are each country exports that good in which it has a comparative advantage - Trade between two countries can benefit both countries if 4 - In order to know whether a country has a comparative advantage in the production of one particular product we need information on at least _____ unit labor requirements in producing imports indirectly more efficiently than it could domestically - A country engaging in trade according to the principles of comparative advantage gains from trade because it David Ricardo - The earliest statement of the principle of comparative advantage is associated with