Curriculum Econ 101, Part 6: Trade, Exchange Rates & Globalization
Econ 101, Part 6: Trade, Exchange Rates & Globalization
Why countries trade at all, how currencies get priced against each other, and what globalization really costs and delivers.
- Comparative Advantage: Why Countries Trade Countries gain from trade by specializing in what they give up the least to produce, not necessarily what they produce best. 📄 Read-aloud
- Absolute vs. Comparative Advantage Absolute advantage measures who produces more, while comparative advantage measures who gives up less - and it's comparative advantage that actually drives beneficial trade. 📄 Read-aloud
- Exchange Rates: How Currencies Are Priced Exchange rates are set by the relative supply and demand for currencies, and they shape how expensive imports and exports feel to ordinary people. 📄 Read-aloud
- Tariffs and Trade Barriers Tariffs and quotas raise the cost of imported goods, and the bill is largely paid by domestic consumers even though the policy targets foreign producers. 📄 Read-aloud
- Trade Deficits and Surpluses, Explained A trade deficit means a country imports more than it exports, but that alone doesn't mean the country is losing economically. 📄 Read-aloud
- Globalization: Costs and Benefits Globalization has lowered prices and lifted growth worldwide while also displacing workers in specific industries and regions - and how those gains and losses are distributed remains hotly debated. 📄 Read-aloud
- Currency Pegs and Floating Exchange Rates Currencies can float freely with the market or be pegged to a fixed value by their government, and each choice carries its own risks. 📄 Read-aloud
- Balance of Payments Basics The balance of payments tracks every transaction between a country and the rest of the world, and it always balances overall even when individual parts run deficits or surpluses. 📄 Read-aloud
- Outsourcing and Global Supply Chains Companies outsource production across countries to cut costs and boost efficiency, but the resulting global supply chains create real vulnerability to disruption. 📄 Read-aloud
- Trade Agreements and Economic Blocs Trade agreements reduce tariffs and other barriers between signatory countries, and joining an economic bloc trades away some independence for greater market access and stability. 📄 Read-aloud
- Terms of Trade What the terms of trade measure, why changes in export and import prices can make a country richer or poorer, and why commodity exporters watch them closely. 📄 Read-aloud
- The Gravity Model of Trade Why countries trade most with large, nearby economies, and how the gravity model became one of the most successful tools in economics. 📄 Read-aloud
- Dumping and Anti-Dumping Duties What it means when a country exports goods below normal prices, how anti-dumping duties work, and why they are controversial. 📄 Read-aloud
- Capital Flows and Hot Money How money flows between countries through investment and lending, why sudden reversals can cause crises, and how countries manage the risk. 📄 Read-aloud
- Rules of Origin: Where Is a Product From? Why trade agreements need rules to decide which country a product comes from, and how these rules prevent goods from dodging tariffs. 📄 Read-aloud