The effects of international trade on GAP Exporting goods and services generate revenue here so it is a component of G. D. P. Importing generates income abroad so it has a negative on G. D. P. Calculations. So what this means is having more exports than imports add to G. D. P. , but lower exports than imports contract G. D. P. The effects of international trade on domestic markets Consumers who buy foreign-made goods or goods that are made with foreign- made components contribute to international trade.
That can be a positive move if the goods can be made more cost-efficiently in another country. International trade occurs when individuals, cities, regions and countries specialize in what hey do best and trade the surplus (Colander, 2010). The standard of living increases due to specialization and trade for trading parties because they gain revenue on goods that they export and can import goods that they cannot manufacture cheaper than another country. Exports create income for us and have a positive effect on the GAP, while imports represent money spent elsewhere and can slow our economy down.
The biggest factor to be considered with international trade would be the exchange rates for exports and imports. If our dollar depreciates, loses value against other currencies, the prices of imported goods is driven up and sales of these goods wane. Goods made in the US consequently become cheaper abroad and exports increase. The President of the United States can put tariffs on imports if it is in the interest of domestic interests. A scenario that would warrant the president to put tariffs on certain imports would be to protect a fledgling US industry for a particular product.
The effects of international trade on University of Phoenix students According to the Department of Commerce, U. S. Receipts from international students studying in the United States reached $17. Billion in 2008, the highest amount yet recorded. International students travel to the US for their education, pay tuition, fees, and living expenses to U. S. Institutions. The tuition and fees paid by international students create more revenue for public and private institutions. This can add up to savings on tuition for US students at these educational institutions.
It also allows for the students to benefit from the additional funding that American universities invest in research and innovation. How Government choices in regard to tariffs and quotas affect international relations and trade A tariff is a tax that is added to the cost of imported goods by the government. Tariffs are usually created to protect developing economies and industries or for political leverage. The government decision to add a tariff to goods depends on the situation. Say for instance it is an election year.
A government may decide to apply tariffs to imports to appease voters and ease their fears of American job loss to foreign countries. A government may add a tariff on products that it feels is harmful to the population. The government would also set tariffs as retaliation for infractions to trade laws or political infractions. An example would be a tariff added to goods from a country that the US deems treats its laborers inhumanely. Retaliation tariffs can also be applied if a country goes against the government’s foreign policy.
Foreign exchange rates According to Colander, the foreign exchange rate is the price of one country’s currency expressed in another country’s currency. The foreign exchange rate tells me what the value of my currency is in comparison to your currency. For example, if one yen has a higher exchange rate against one dollar, the relative value of the dollar is lowered. Foreign exchange rates are determined each country’s GAP and how much one unit of a currency can be exchanged for another currency.
Currency exchange rates will fluctuate and change to reflect the condition of each country’s economy Why doesn’t the U. S. Simply restrict all goods coming in from china? Why can’t the U. S. Just minimize the amount of imports coming in from all other countries? China ranks as the U. S. ‘s third largest export market. According to America’s exports to China have grown at a much faster pace than exports to any of our other top trading partners( ). We cannot ford to restrict all goods coming in from China for two major reasons.
One reason not to restrict China imports would be the debt that the US has to China. The second reason not to restrict their imports is to create jobs for American workers through exports. It would also not be feasible to restrict all imports. Imports can be beneficial to our economy when we are able to purchase goods internationally for less than the cost of us producing it at home. An example would be when American workers manufacture parts and software that China imports from us to produce computers that are then exported to the US at a rower price then we could manufacture the whole product.