Econ 1101 1st Edition Lecture 19Outline of Last Lecture 1. Gains from trade: comparative advantage2. Gains from trade: increasing returns3. Real world example: international division of laborOutline of Current Lecture 4. Trade Policy5. China and US Trade6. MobLab ExperimentCurrent LectureBilateral Trade Agreement: you lower tariffs, I lower tariffs. Example= US/KoreaMultilateral Trade Agreement: Everyone to lower tariffs on each other. Example = North American Free Trade AgreementUnilateral Free Trade: I lower tariffs, take down barriers, regardless of what you do. Example = England repeals corn laws (tariff).China/US TradeSkilled = college educatedunskilled = no college education neededChina has a comparable advantage when it comes to unskilled labor.US has comparable advantage in high-skilled labor.If the wages are low for a certan good in China the US has more interest in a market share.Manufacturing goods is almost completely wiped out in USOne take is that China/US trade is mutually beneficial.Much of trade isn’t actual goods, it is Goods to the US and money to China.US has a comparative advantage in consumption. (LOL)US is paying for imports by going into debtThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.US blames China for manipulating the Renminbi to promote exports and discourage consumptionUS is NOT innocent.Germany, like China has a huge trade surplus..so why is Germany saving but the US not Intellectual Property US sengs China IDEAS and research and China sends NOTHING back.Chinas Policies:There is no doubt they are aggressively subsidizing green energy because the price has fallen 2/3.We put huge tariffs on green energy to encourage domestic innovation on sales to keep up with the innovations and inventions in green energy throughout the world so we don’t fall
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