CHAPTER OUTLINE
I. Introduction
• increasing interdependence
• 1975–2005 – world trade increased by 350 percent
• purpose of international economics
II. The Scope of International Economics
• microeconomics
• macroeconomics
• international economics
• course outline
➢ chapters 1–11 – microeconomics
➢ chapters 12–21 – macroeconomics
• keeping international economics in perspective, i.e., domestic
economic activity also is important
• importance of international economics
➢ the world economy
➢ differences among countries
➢ standards of living
➢ international trade in services
,III. The Output of the World Economy
• the importance of the concept
• world GDP = $44.7 trillion
• an aside on the World Bank
• Table 1.1
IV. Imports and Exports of Goods in the World Economy
• imports
• exports
• Table 1.2
• Figure 1.1 – world exports and world GDP
• U.S. States and Regions in the World Economy
V. International Trade in Services
• issues
➢ invisible trade
➢ measurement problems
➢ a new area of study
➢ relative size – $2.4 trillion
• Table 1.3
• The U.S. Position in the World Economy — Figure 1.2
,VI. Capital Flows in the World Economy
• multinational corporations (MNCs)
• portfolio capital
• foreign direct investment (FDI)
• Table 1.4
• foreign exchange market
• the exchange rate
VII. Trends in International Production and Trade
• Table 1.5
• The Growth of the World Economy: Historical Perspectives and
Future Trends
VIII. Globalization
• definition
• Table 1.6 – A country perspective
• Figure 1.3 – A world perspective
• analyzing globalization
➢ costs
➢ benefits
, TEACHING NOTES AND TIPS
I. Introduction
Notes
The introduction begins by emphasizing the interdependence of the economies of the
world. The second part is a listing of the topics covered in the chapter.
Teaching Tip
Introduce the concept of autarky by asking the students what their lives would be like if the
U.S. did not interact with any other economies.
II. The Scope of International Economics
Notes
This section shows students how to relate the new course to the courses they have already
taken. The emphasis is on reviewing the concepts of microeconomics and macroeconomics
and explaining how they relate to international economics.
Teaching Tip
Emphasize the example in the text on how economics is conceptually like medicine.
International economics is one of the major branches of economics that uses concepts
developed in other parts of the discipline. In this sense, it is analogous to a major branch of
medicine like internal medicine.
III. The Output of the World Economy
I. Introduction
• increasing interdependence
• 1975–2005 – world trade increased by 350 percent
• purpose of international economics
II. The Scope of International Economics
• microeconomics
• macroeconomics
• international economics
• course outline
➢ chapters 1–11 – microeconomics
➢ chapters 12–21 – macroeconomics
• keeping international economics in perspective, i.e., domestic
economic activity also is important
• importance of international economics
➢ the world economy
➢ differences among countries
➢ standards of living
➢ international trade in services
,III. The Output of the World Economy
• the importance of the concept
• world GDP = $44.7 trillion
• an aside on the World Bank
• Table 1.1
IV. Imports and Exports of Goods in the World Economy
• imports
• exports
• Table 1.2
• Figure 1.1 – world exports and world GDP
• U.S. States and Regions in the World Economy
V. International Trade in Services
• issues
➢ invisible trade
➢ measurement problems
➢ a new area of study
➢ relative size – $2.4 trillion
• Table 1.3
• The U.S. Position in the World Economy — Figure 1.2
,VI. Capital Flows in the World Economy
• multinational corporations (MNCs)
• portfolio capital
• foreign direct investment (FDI)
• Table 1.4
• foreign exchange market
• the exchange rate
VII. Trends in International Production and Trade
• Table 1.5
• The Growth of the World Economy: Historical Perspectives and
Future Trends
VIII. Globalization
• definition
• Table 1.6 – A country perspective
• Figure 1.3 – A world perspective
• analyzing globalization
➢ costs
➢ benefits
, TEACHING NOTES AND TIPS
I. Introduction
Notes
The introduction begins by emphasizing the interdependence of the economies of the
world. The second part is a listing of the topics covered in the chapter.
Teaching Tip
Introduce the concept of autarky by asking the students what their lives would be like if the
U.S. did not interact with any other economies.
II. The Scope of International Economics
Notes
This section shows students how to relate the new course to the courses they have already
taken. The emphasis is on reviewing the concepts of microeconomics and macroeconomics
and explaining how they relate to international economics.
Teaching Tip
Emphasize the example in the text on how economics is conceptually like medicine.
International economics is one of the major branches of economics that uses concepts
developed in other parts of the discipline. In this sense, it is analogous to a major branch of
medicine like internal medicine.
III. The Output of the World Economy
