International Trade and Exchange Rates
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Please review the following video to increase your understanding of the effect of specialization on gains from trade.
- Specialization and Trade (Links to an external site.)
- Take a closer look at our local economy or a country of your interest and pick a good or a service that you believe America (or your country of choice) has a comparative advantage in producing. Discuss the factors that you believe give America (or your country of choice) such an advantage.
- In addition, is it better for a country to export more or to import more?
- Moreover, what is the impact of trade surplus (exporting more than importing) and trade deficit (importing more than exporting) on GDP, employment, and the exchange rate of the country’s currency?
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