Notes

Why do countries trade with each other?
Answer: A country may not have the ability or materials to produce a particular item, but does have the materials to produce another. So they develop trading partners. In addition, countries may be able to produce items at lower opportunity costs, which lead to the best utilization of resources (efficiency).

How is trade important to the United States?
Answer: Trade is important because it boosts the economy of the U.S. and allows U.S. companies to expand their markets and sell more goods. United States' companies are the world's leading exporters and importers of certain goods and services. The United States exports a great variety of goods and services and leads the world in the manufacture of products like computer software and technological equipment. Therefore, U.S. firms are able to sell their goods overseas boosting the U.S. economy. Imports are also important to the U.S. because they bring goods into the country that U.S. companies cannot make at a comparative advantage. These imported goods are sold at cheaper prices than what American companies can make and sell the goods for.

List three of the major imports, exports, and trading partners of the U.S.
Answer: Imports: Vehicles, crude oil, electrical machinery, clothing, industrial machinery, equipment, chemicals
Exports: Chemicals, machinery, airplane parts, types of equipment, vehicles, telecommunications equipment, scientific instruments
Partners: European Union, China, S. Korea, Japan, Canada, and Mexico

What are the influences of trade and multinational corporations on global economic activities?
Answer: Multinational corporations help provide jobs and build infrastructure in countries where they set up operations. These companies benefit from lower wage requirements and a large workforce resource. Trade benefits countries because it allows them to focus on producing goods at a lower opportunity cost, promoting efficiency. Yet they can still get the goods their people want and need.

How do trade barriers and free trade influence economic activities?
Answer: Trade barriers are used to block imports of certain products or from specific countries. This lowers the competition that domestic companies have to deal with. It also helps newly established businesses to get a foothold into the economy and safeguards certain industries that the U.S. might have to depend on in times of war. So, trade barriers lower competition and protect jobs in the country. Despite the arguments favoring protectionism, a number of countries around the world, including the United States, have entered into trade agreements with each other and, in some cases, have formed organizations that promote free trade among a group of nations. Many feel that such actions will go far in improving the global economy and will help foster better diplomatic relationships among countries.
========================================================================================================================================Look at the list of the following countries and identify which of them are less developed countries/areas: United States, Central America, Southern Tip of Africa, Eastern Africa, South Central Asia, Western Europe. Also, explain three characteristics of a developed country and three of a less developed country.
Answer: United States: Developed; Central America: Less Developed; Southern Tip of Africa: Less Developed; Eastern Africa: Less Developed; South Central Asia: Less Developed; Western Europe: Developed
Developed countries have longer life expectancies, better education, higher literacy rates, higher standards of living, and low unemployment. Less developed countries have a higher mortality rate, low literacy rates, few educated people, high unemployment, and low standards of living.

How do the values of society affect economic development in countries?
Answer: Societal values will also influence the development rate of a country. Many societies do not value educational interests. Often children are needed for manual labor on family farms so that necessary food can be produced to feed the family. In addition, children of wealthy families that are fortunate enough to attend colleges and universities often move to more developed countries to further their careers, further draining the human capital of the country. Countries that have a traditional economy (based on the traditions and culture of a society) affect the level of development. Countries that have a traditional economy often develop at a slower pace than countries with a free market economy. In addition, members of these economies are often resistant to change, making development an even slower process.
========================================================================================================================================Why are exchange rates between countries so variable?
Answer: Exchange rates are variable because the value of one currency does not always match the value of another.

What are the functions of the World Bank?
Answer: The World Bank lends billions of dollars each year to countries for economic development. It is the largest provider of development assistance. These loans have helped countries build new hospitals, roads, and educational institutions, improving the lives of citizens through economic achievements such as the development of industries and jobs.

What are the functions of the United Nations Development Program and the International Monetary Fund?
Answer: The United Nations Development Program (UNDP) was organized in the mid-1960s. Its main goal is the eradication of poverty through economic development. It provides grants to less developed nations to help improve economic and social processes. The International Monetary Fund was originally established to stabilize international exchange rates. However, the goals of this organization have increased to aiding and overseeing development projects.