Posted in economics on Sep 5th, 2008
This post involves a fictional company called Acme Motors. Acme manufactures automotive engines in Mexico and ships them to Detroit for inclusion in their automobiles. Comparative advantage is the “advantage a nation has by being able to produce products or services more efficiently and at lower cost than a competitor nation” (ENERGEX, n.d.). Without comparative [...]
Posted in economics on Sep 1st, 2008
International trade presents unique opportunities and threats to workers. Workers in developing countries experience the most opportunities from international trade. Thanks to direct foreign investment, new job opportunities and technological innovation leads to increased wages for workers in developing countries. These opportunities in developing countries may even lead to worker migration as workers in some [...]
Posted in economics on Aug 29th, 2008
The economic experience of Mexico has changed tremendously since the acceptance of the North American Free-Trade Agreement (NAFTA) in 1994. Over the last 14 years, Mexico has experienced tremendous growth spurred on by the introduction of capital from foreign investment and gradually reduced tariffs on exports. To understand the changes Mexico has experienced over this [...]
Posted in economics on Aug 25th, 2008
Sawyer and Sprinkle (2006) define globalization very generally as “the increasing openness of an economy” (p. 14). Although this definition is serviceable enough, its vague meaning is not very helpful. More specifically, globalization relates the idea that international factors are becoming increasingly more important in the world economy. Globalization is not a term meant to [...]
Posted in economics on Nov 30th, -0001
The current account represents the sum of balance on goods, services, income yields, and unilateral transfers. It is an indicator of the flow of capital and goods to and from a country. The U.S. currently runs a current account deficit. This means that more goods and services are being imported into the country than exported.