Posted in economics on Oct 1st, 2008
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. [...]
Posted in economics on Sep 22nd, 2008
It can be proven that free trade is good for any country. The gains to consumers due to free trade outweigh the losses suffered by import-competing domestic industries. Unfortunately, these gains are spread out across many people, while the losses are concentrated in a much smaller group of businessmen and workers (Sawyer & Sprinkle, 2006). [...]
Posted in economics on Sep 14th, 2008
The International Monetary Fund (IMF) was established at Bretton Woods, New Hampshire in 1944. It was originally tied closely to the gold-exchange standard established at that time. It originally provided a pool of funds for distressed countries to use temporarily to correct imbalance issues. Once the gold-exchange standard was removed, the IMF became more involved [...]
Posted in economics on Sep 8th, 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.
Trade barriers come in many varieties. They are often overt government policies such as tariffs, quotas, and subsidies. More subtle varieties such as transportation costs also exist. Trade barriers of any [...]
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 advantage, [...]