BAIB3004 Week 5 Lecture Recap 24/25

Front

What is the definition of unemployment in the context of international trade?

Back

Unemployment in international trade refers to the situation where individuals who are actively seeking work are unable to find jobs due to various factors related to global economic interactions. It's an important indicator of how trade policies and international economic relationships affect domestic labor markets.

Front

How might international trade affect a country's unemployment rate?

Back

Trade can have both positive and negative effects on unemployment, depending on various factors:

 

Increased exports can lead to job creation in export-oriented sectors.

 

Import competition may lead to job losses in import-competing industries.

 

The net effect depends on the country's economic structure, labor market institutions, and trade patterns.

Front

Can you think of an example where increased international trade could lead to changes in employment in specific sectors?

Back

Examples!

Front

What does the term "trade balance" mean?

Back

The trade balance is the difference between the monetary value of a country's exports and imports of goods over a specific period.

Front

How is a trade surplus different from a trade deficit?

Back

Trade surplus: Occurs when a country exports more than it imports, resulting in a positive trade balance.

 

Trade deficit: Occurs when a country imports more than it exports, resulting in a negative trade balance.

Front

Why is the trade balance considered an important economic indicator for a country?

Back

Economic health: It provides insights into a country's economic strength, competitiveness, and productivity in the global market.

Global trade relations: Persistent imbalances can lead to trade disputes or negotiations for more favorable trade agreements.

Component of balance of payments: The trade balance is a key part of a country's overall balance of payments, reflecting its economic standing.

Front

In what ways can changes in price levels impact a country's trade competitiveness?

Back

Higher domestic price levels reduce competitiveness as exports become more expensive for foreign buyers, lowering demand.

Conversely, lower price levels improve competitiveness by making exports cheaper and more attractive internationally.

Front

How might changes in a country's money supply affect its international trade position?

Back

Expanding the money supply often leads to currency depreciation, making exports cheaper and imports more expensive.

Excessive money supply growth can lead to inflation, eroding export competitiveness by increasing production costs and prices.

Adequate money supply supports external liquidity, enabling smoother international transactions and strengthening export performance.

Front

What is the definition of Gross National Product (GNP)?

Back

GNP is the total value of all goods and services produced by a country's residents and businesses, regardless of where the production occurs. It includes income earned by residents from overseas investments and excludes income earned by foreign residents within the domestic economy.

Front

What are the main components included in the calculation of GNP?

Back

Consumption expenditure

 

Investment

 

Government expenditure

 

Net exports (exports minus imports)

 

Net income from abroad (income earned by residents abroad minus income earned by foreigners domestically)