The first question I was presented with Is, “What happens when there Is a surplus of Imports brought Into the U. S.? Whenever there Is a surplus of products, regardless of origin, the price drops. Even to the point of selling at a loss, the holder has already paid the invoice and taxes, but still has to pay storage, the longer it holds the product the more money it costs, selling at a loss moves the product out of storage and clears the store front for another product. A surplus of imports is good for consumers but bad for local business.
We have to produce and manufacture In order to export. As our export trade shrinks, so does our workforce and economy. The surplus of Imported cars for 2012 has exceeded the exportation by $152 billion. Also he shelf life of cars is 1 year. Every year at the end of the cycle the existing models are sold off at huge discounts to make room for the new models, which is good for the consumer. The second question brought up to me is, “What are the effects of international trade to GAP, domestic markets and university students? International trade comprises exports and Imports, the net result of which affects our GAP. Since our Imports exceed our exports our GAP would be Impacted by our net exports or deficits. The rippling effect of financing deficits is an increase in interest rates from selling bonds that reduces investments and growth. This further reduces GAP. Domestic markets flourish when there is a demand for local products overseas. If the domestic markets have to compete with imported products it could be a struggle. However Jobs can be created for the advertising, sales, and distribution of foreign Imports.
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The effect of International trade on university students has recently brought worldwide market for international students, the U S was able to capture a market share of 45%, showing a healthy surplus of $12. 6 billion in higher education. The third question brought up is “What are foreign exchange rates? How are they determined? A foreign exchange rate is the rate at which one currency would be exchanged for another. It is essentially the value of a currency when compared to demand. When the supply of a currency exceeds the demand, the value of the currency falls. However when the demand for a currency exceeds the supply the value rises.
Along with citations and reference listings, I have used quotation marks to identify quotations of fewer than 40 words and have used block indentation for quotations of 40 or more words. Nothing in this assignment violates copyright, trademark, or other intellectual property laws. I further agree that my name typed on the line below is intended to have, and shall have, the same validity as my handwritten signature. Student’s signature (name typed here is equivalent to a signature): Crystal Center