Module 12 - Understanding Economic Activity in an International Context
Document Actions
Activity 1 : : Activity 2 : : Activity 3 : : Activity 4 : : Activity 5
Activity 1: Introduction
Understanding International Trade
This objective will acquaint you with the ways that countries try
to protect their home market from foreign producers by limiting the
types and volumes of international trade they allow.
This will assist you in understanding the types of
Protection that exist (such as Tariffs), why these are used, and the
associated costs and benefits of these practices. You should also
understand the benefits of international trade, and the reasons it
exists.
Understanding Actions and Organizations Affecting
International Trade
To master this objective, you must be familiar with categories or types
of international trade, both mechanically and in terms of their effects
on the domestic economy. This would assume that you understand
both important pieces of Trade legislation, and historically important
trade regimes, as well as the international organizations that assist
countries in managing trade and international payments.
Understanding the Effects of Trade on the Domestic
Economy
Foreign trade in both goods and services, and money (foreign currencies
and other monetary instruments and assets) affects the home economy in
a number of important ways. In fact, economists study the case of
an Open Economy, and that of a Closed Economy separately, because in
the case of an Open Economy the effect of Imports, Exports and
International Monetary Flows will be a factor influencing domestic
Prices, Rates of Inflation, Employment and Interest Rates. As you
complete this activity, you will come to understand the role
of Trade in the determination of Prices and other economic variables at
home.
Negative Practices in the Area of International
Trade
Unethical and Illegal Trade Practices in the international trading
arena are problematic from an economic standpoint. The point of
this Activity is for you to become familiar with the economic effects
on workers, products, and consumers of practices such as Dumping,
Subsidies, Predatory Pricing and other international trading practices
designed to harm competitors abroad.
Activity 1 : : Activity 2 : : Activity 3 : : Activity 4 : : Activity 5
