Globalization of Trade Flashcards
Describe changes in U.S. international trade over the past 50 years.
Both U.S. imports and exports have grown dramatically over the past 50 years.
The U.S. is by far the world’s largest importer and one of the top three exporters.
Imports and exports each account for about 15% of purchases and output, respectively.
The U.S. exports only more agricultural products and services than it imports.
Identify 5 factors that have facilitated or enabled an increased in global trade.
Reductions in trade barriers;
Increased economic integration between nations;
Regional trade agreements;
Development in communications (e.g., internet);
Development in the financial sector.
The U.S. exports only more___ ___ than it imports.
agricultural goods
For the past 50 years or so, ___ have accounted for an increasing proportion of all purchases in the U.S.
imports
The U.S. ___ more goods than any other country.
imports
Goods sold to a buyer in another country would be considered ___ to the seller.
exports
During the past 50 years or so,___ ___ has grown faster than the rate of world-wide economic growth.
international trade
Globalization of trade has been facilitated by reductions in ___ ___.
trade barriers
International trade benefits who?
both the sellers and buyers of goods
The proportion of U.S. output that is exported has ___ ___ for the past 50 years or so.
steadily increased
Both U.S. imports and exports have ___ ___ over the past 50 years.
grown dramatically
Who is by far the world’s largest importer and one of the top three exporters?
The U.S.
Imports and exports each account for about ___% of purchases and output, respectively.
15%
Identify 4 types of special costs associated with international trade that often are critical in determining the viability of such trade.
- Transaction costs, including costs of using letters of credit and costs of mitigating currency exchange risk;
- Transportation costs, the extra costs of shipping goods long distances and/or using more costly transportation methods;
- Tariff and other compliance costs, including the direct costs of tariffs and complying with other requirements;
- Time costs, the costs associated with the extra time due to distance and other requirements.
Goods acquired from a foreign country would be considered ___ to the buyer.
imports
The long-term trend has been for U.S. exports to ___ and for U.S. imports to ___.
decrease; increase.
Define “globalization of trade”.
Globalization of trade : The exchange of goods and services between and among countries
Define “import”.
Import: A good or service acquired from a seller in a foreign country.
Define “export”.
Export: A good or service sold to a buyer in a foreign country.
___ is now the largest export nation by a significant amount.
China
U.S. imports of ___, ___, and ___ goods are greater than its exports of those items.
industrial, consumer and automotive
U.S. exports of ___ and ___/___ goods, and services is greater than its imports of those items.
capital and agricultural/food
What are “transaction costs”?
The costs associated with any transaction, but which will have additional elements in international transactions, including the additional costs of negotiating with suppliers and customers, using letters of credit, currency exchange, and hedging;
What are “transportation costs”?
The cost of shipping goods from the point of production to the point of consumption, whether for goods sold (exports) or goods purchased (imports);
What are “tariff and other restrictive costs”?
The direct cost of tariffs and the indirect cost of meeting standards or other requirements that may be unique to a country;
What are “time costs”?
The cost of delays due to distance and inspection and other import/export functions.
The long-term trend has been for U.S. exports to ___ and for U.S. imports to ___.
decrease; increase
