• Strand The International Economy 
    Standard 3.2 Economic Interdependence-Trade Grade Level HS  
         
     
     
     
     
     
    Code:
     
    3.2.1
     
     
    3.2.2
     
     
     
    3.2.3
     
     
     
    3.2.4
     
     
    3.2.5
     
     
     
     
     
     
    GLCE/HSCE

    Absolute and Comparative Advantage – Use the concepts of absolute and comparative advantage to explain why goods and services are produced in one nation or locale versus another.

    Domestic Activity and World Trade – Assess the impact of trade policies (i.e. tariffs, quotas, export subsidies, product standards and other barriers), monetary policy, exchange rates, and interest rates on domestic activity and world trade.

    Exchange Rates and the World Trade – Describe how interest rates in the United States impact the value of the dollar against other currencies (such as the Euro), and explain how exchange rates affect the value of goods and services of the United States in other markets.

    Monetary Policy and International Trade – Analyze how the decisions made by a country’s central bank (or the Federal Reserve) impact a nation’s international trade.

    The Global Economy and the Marketplace – Analyze and describe how the global economy has changed the interaction of buyers and sellers, such as in the automobile industry.

     
    Key concepts
    Essential understandings
    (Procedural or Conceptual)
     
    Vocabulary-
    absolute advantage, comparative advantage, trade policies, monetary policy, exchange rates, interest rates, Federal Reserve, international trade, global economy, automobile industry, central bank
    Aligned Assessments
     Students will know
     
    1. The concepts of absolute and comparative advantage as it relates to trade
    2. The effect of various policies on domestic activity and world trade
    3. How interest rates and the value of the dollar impact goods and services in other markets
    4. How central banks can impact international trade
    5. How the global economy has evolved
     
     Students will be able to
    1. Apply comparative and absolute advantage to justify patterns of production and trade
    2. Determine the impact that trade policy and monetary policy have on domestic and international trade
    3. Illustrate how interest rates and currency value impact the trade of goods and services with other nations
    4. Interpret the decisions made by a central bank and the effects it has on international trade
    5. Recognize and cite historical evidence on how the global economy has evolved
     
    Student-friendly Language Target Assessment
    1.  I can apply comparative and absolute advantage to justify patterns of production and trade
    *Explain and give an example of why even though the U.S. makes much more butter then Canada, the U.S. still might trade for Canadian butter.
    2.  I can determine the impact that trade policy and monetary policy have on domestic and international trade
    *Explain how a Tariff on Toyota, Mazda, and other foreign cars can affect both domestic and international trade
    3.  I can illustrate how interest rates and currency value impact the trade of goods and services with other nations
    *How might a 1% increase of the federal reserve interest rate change the global real estate market.
    4. I can interpret the decisions made by a central bank and the effects it has on international trade
    *Explain and describe a scenario of what might happen globally if the National Bank of America printed out an additional $1 Billion in currency.
    5. I can recognize and cite historical evidence on how the global economy has evolved
    *Explain the causes, changes, and events that took place that tranformed America from a Standards based economy into a Fiat based economy.


    1. The use of NAFTA has allowed the USA to have a comparative advantage over the other member states in the supply/manufacturing of:

      1. US Leather production over Canadian Auto manufacturing
      2. US Cheese production over Canadian Wine
      3. US Cheese production over Mexican Wine
        US Milk production over Canadian Cheese
    2. An absolute trade advantage can be observed in the supply of diamonds from

      1. China

      2. Russia

      3. Canada

      4. South Africa

    3. The following conditions must be considered when determining a comparative advantage

      1. labor and production costs

      2. labor and subsidies

      3. subsidies and tariffs

      4. production costs and free trade requirements

     
Last Modified on February 14, 2018