Unpacked Content
Knowledge
Students know:
- The difference between absolute and comparative advantage and the importance of each.
- The types, purpose and impact of trade barriers.
- The factors that affect exchange rates.
- How changes in exchange rates affect trade.
- The international organizations and agreements that impact globalization.
Skills
Students are able to:
- Determine comparative advantage by calculating opportunity costs.
- Calculate gains from trade based on comparative advantage.
- Determine how certain factors affect exchange rates.
- Determine how changes in exchange rates affect global trade.
Understanding
Students understand that:
- Comparative advantage plays a role in trade and it leads to gains from trade.
- Countries impose trade barriers and the economic impact of these barriers.
- Many factors affect exchange rates.
- Changes in exchange rates affect trade between countries.
- International trade leads to economic growth and higher standards of living worldwide.
Vocabulary
- globalization
- absolute advantage
- comparative advantage
- gains from trade
- exchange rate
- currency appreciation
- currency depreciation
- purchasing power parity (Big Mac Index)
- import
- export
- trade deficit
- trade surplus
- tariff
- quota
- embargo
- export subsidies
- NAFTA
- CAFTA
- EU
- WTO
- IMF
- World Bank
