International Trade

International allot is the exchange of goods and services with other countries. It bed represent a substantial sh be of the GDP for the US. great international job helps the US economy as coherent as trade balances are kept drink down. Two tools the regime can use to help manage the economy are fiscal policy and monetary policy. The fiscal policy is changes in government spending, borrowing, or taxes to either speed up or slow down the economy. The monetary policy is the Feds control over the money supply. The exchange rate determines how such(prenominal) the US dollar is worth, which in turn affects the amount of imports and exports. Protectionism is a policy limiting trade between nations.

Balance of trade is defined as the difference between the monetary prise of exports and imports over a period of time. A trade superfluity happens when you export more than you import and a trade famine happens when you import more than you export. Since the 1970s the US has had a trade deficit. As of November 06, 2006, the US had a deficit of 70.1 meg for September, this down from 74.9 billion in August. The US had a surplus of services, 5.8 billion in September which is down from 5.9 billion in August.



Patterns specify that the deficit increases faster during stinting expansion and increases slower during economic contractions. This deficit can be blamed on several(prenominal) factors which include: continued economic growth in the US, move oil prices, continued increase of imported products, continued enquire for US investment asset, and continued dependency on impertinent countries for food, raw materials, and natural resources. Some people believe that a trade deficit is not good for the countrys economy. During a recession, countries usually export more which creates more jobs and increases demand. During an expansion, countries usually import more which creates price competition and keeps inflation down. Therefore, a trade deficit would be good for the economy during an...If you deprivation to get a full essay, order it on our website: Orderessay



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