International Trade and Finance Assignment

International Trade and Finance Assignment Words: 844

Then we will address any issues you may still have. The first issue I want to discuss is what happens when the United States has an import surplus in a particular product or class of products. This means the United States has bought too much of something from another country than It can use. For example, the united States buys oil from other countries, and if the united States buys more than the people can use. The United States will have to store the extra oil, and so it costs more money, and this will cause costs to rise for both consumers and businesses that need to use and arches oil.

The second issue I want to discuss is the effects of international trade on real GAP growth. There was a decline of goods and services the united States exports In the last quarter’s reports, and Inventory Investment as well. Both these factors subtracted from the real GAP growth. It Is a belief that Hurricane Sandy Is a factor in why the international imports and exports, and the slow inventory investments have gone down in the fourth quarter. The effects of international trade on domestic markets are small because the two are different in many aspects.

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International trade happens when two different nations conduct activity for business or consumption purposes, and domestic trade happens when two markets in the same country conduct the activity. In domestic trade there are manufacturers, wholesalers, and retailers. According to Bangkok Logistics, “The reason It contributes to the economy in a great way is because there is less on government policies enlisted on them and the guarantee of payments is clear and prompt. ” The effect of international trade on university students has both advantages and drawbacks. According to M. A.

Owens (2002), “Historically, education has provided the medium for transferring knowledge and skills to a global society” According to M. A. Owens (2002), “There are problems with budget shortfalls, Increasing enrollment demands, escalating educational costs, and a reduction in foreign aid. ” Also there is the protectionism policies governments use to restrict international trade in education. According to M. A. Owens (2002), “Education services are defined as primary education services, secondary education services, higher or tertiary education services, adult education services, and other education services.

Also according to M. A. Owens (2002), “By opening domestic markets to foreign education service providers, which results in greater efficiency, lower prices, improved service, more consumer choices, reduced inequality, and increased employment. ” Martin Rudder states, “international trade in postsecondary education services is rising because of more students studying abroad, more international marketing of academic programs, enhanced educational cooperation between institutions, and the development of foreign institution branch campuses. The next issue is how government choices tit regard to tariffs and quotas affect international relations and trade. Tariffs are taxes on imports the government adds to raise money. Quotas are limits put on certain imports by the government. Both can hinder international relations and trade and can increase the costs of production. The next issues are what foreign exchange rates are and how they are determined. The foreign exchange rates definition is the rate one currency is made into another and is mostly by the volume of currencies bought and sold for both speculation and international transactions.

According to N. B. Session, “short-term exchange rates fluctuate minute by minute, and changes are driven by shifts in the supply and demand for currencies as they are purchased and sold against one another. From a long-term standpoint, foreign exchange markets are more heavily affected by the monetary policy directives of national governments as the global economic climate. ” The last issue is why the United States simply not restricts goods coming in from China.

There are several reasons 1) the cost of imports is cheaper than producing the products, 2) China has ore of certain resources than the United States, and 3) China helps the United States maintain economic growth. When the costs are lower this saves the United States money in production and in employment costs. The United States has limited natural resources this makes costs go up, but if the United States buys from a country that has an abundant supply this helps keep costs down. China helps maintain economic growth by buying the United States’ debt in the form of bonds, which allows the government to have more money supply available.

The United States cannot Just minimize the amount of imports coming in from other countries because this would cause many problems. 1) The United States would not be able to maintain economic growth, 2) there are limits on some resources available within the United States, which causes limits on certain items, and the costs of those items would go way up, and 3) this causes the United States to have bad relationships with the countries they break ties with. As much of the United States’ economic growth depends upon imports and exports, this would cause serious problems for economic growth.

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