SS10.E.12

Social Studies (2010) Grade(s): 12 - Economics

SS10.E.12
Explain why individuals, businesses, and governments trade goods and services in the global economy.

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

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