THE FOREIGN SECTOR
CHAPTER 16
,LEARNING OUTCOMES
• Explain why countries trade.
• Explain how absolute advantage and comparative advantage determine
how trade will take place.
• Describe measures to control the volume of imports.
• Discuss exchange rate determination between the US dollar and the rand.
• Explain, with the aid of diagrams, the impact of changes in demand and
supply of dollars on the exchange rate.
• Briefly explain the three policy options for floating exchange rate
regimens. • Explain the significance of changes in the terms of trade.
, 16.1 INTRODUCTION LO: explain what globalisation entails
16.1 INTRODUCTION
Open economy
The extent of a country’s involvement in international
trade and finance The South African economy may be
described as an open economy.
Globalisation
The process whereby the world’s economies have
become increasingly integrated.
See In the real world 16-1 Globalisation: A two-edged sword? (p. 350)
See Box 16-1 International trade and financial organisations (p. 334)
CHAPTER 16
,LEARNING OUTCOMES
• Explain why countries trade.
• Explain how absolute advantage and comparative advantage determine
how trade will take place.
• Describe measures to control the volume of imports.
• Discuss exchange rate determination between the US dollar and the rand.
• Explain, with the aid of diagrams, the impact of changes in demand and
supply of dollars on the exchange rate.
• Briefly explain the three policy options for floating exchange rate
regimens. • Explain the significance of changes in the terms of trade.
, 16.1 INTRODUCTION LO: explain what globalisation entails
16.1 INTRODUCTION
Open economy
The extent of a country’s involvement in international
trade and finance The South African economy may be
described as an open economy.
Globalisation
The process whereby the world’s economies have
become increasingly integrated.
See In the real world 16-1 Globalisation: A two-edged sword? (p. 350)
See Box 16-1 International trade and financial organisations (p. 334)
