International Trade Simulation and Report

In: Business and Management

Submitted By sam17574
Words 2163
Pages 9
International Trade Simulation and Report
Samuel xxxxxxxxx
ECO 212
May 07, 2012
Dr. Holscraft International Trade Simulation and Report Over the last few years the United States of America has been in an economic crisis. The economy has been affected badly by layoffs, factories closing down, and corporations needing bail outs. Whenever there is a high unemployment rate the economy heavily affected by the large number of lost laborers. Without laborers and factories to produce goods and services international trade becomes affected. International trade not only helps the United States economy but, also it helps the global economy as well. International trade provides numerous advantages to the United States economy but many limitations also exist so economic leaders must be aware of the pros and cons when negotiating these trades.
Advantages and Limitations of International Trade
The advantage of a free trade agreement will lower trade barriers, increase trade volume, open different markets, provide more products for consumers, and create more investments opportunities for both countries. Consumers receive the added benefits of competition and companies gain access to new markets. As outside firms invest, this investment creates jobs and tax revenue for the host country and additional revenue for the investing firm. A free trade agreement is an efficient situation for consumers and both countries involved.
However, the disadvantage to a free trade agreement is countries outside of a free trade agreement may produce products more efficiently than countries within the agreement, but because of tariffs imposed on these countries their products will not be as competitive. A free trade agreement allows firms to enter markets that they would not otherwise be competitive in, but because of their affiliation in the free trade agreement they can gain market…...

Similar Documents

Week 8 International Trade Simulation

...International Trade Simulation Week 8 Eco 212   The international simulation report is a compilation of the findings and outlines that reflect advantages and limitations of international trade as a whole. After reading the international trade simulation I did find that there are four distinct points that represent the elements that make up the report. I will be reviewing each point in depth along with providing a compare and contrast of the influences and advantages. I will finally end with a discussion that brings to light the issues surrounding the international trade report and provide a summary. The economy of Rodamia relies on three main areas: agriculture, industry and services. The country is surrounded by neighbors who produce similar and different products. Uthania is specialized in making chocolate and confectionary, but also produces goods such as minerals, coals and corn. On the other hand, Suntize is a tourist attraction which is good at producing electronic goods. Lastly, Alfazia is an agrarian economy and produces goods like corn, rice and cotton. On global interaction there is an economic characteristic where a nations exchanges goods and services to others. Globally this is known as importing and exporting production. Those nations with an open economy in the world is involved such processes with other nations, but they need to make sure they have positive interactions with the nations trading with and some of the traits would be to......

Words: 1112 - Pages: 5

International Trade

...International Trade Simulation The term international trade is defined as the economic interaction among different nations involving the exchange of exports and imports. The main principle of international trade is comparative advantage, which indicates that every country, no matter their level of development, can find something that it can produce cheaper than another country. The purpose of the International Trade Simulation is to show how countries interact with one another when exporting and importing. International trade depends on nations working together, while looking out for their own personal interests. When I began the International Trade Simulation my strategy was to acquire as much wealth as I could for my nation, South America. As the game progressed I began to switch strategies and began to acquire as many different goods as I could for my nation, so that I could offer the people of my nation an array of goods. The global economy at the beginning of my game was horrible and did not proceed to get much better as the game went on. Even though the global economy was bad I was still able to achieve my first goal of acquiring as much wealth as I could. I did this by exporting my goods at top dollar. I found that some countries would buy what I was exporting no matter what price I would ask for even though the global economy was poor, especially when I was exporting crude oil. This made sense to me because most countries depend of crude oil for......

Words: 560 - Pages: 3

Trade Barriers to International Trade

...WHAT IS GLOBAL/INTERNATIONAL TRADE? Global trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product (GDP). While international trade has been present throughout much of history (see Silk Road, Amber Road), it’s economic, social, and political importance has been on the rise in recent centuries. Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing are all having a major impact on the international trade system. Increasing international trade is crucial to the continuance of globalization. Without international trade, nations would be limited to the goods and services produced within their own borders. International trade is, in principle, not different from domestic trade as the motivation and the behavior of parties involved in a trade do not change fundamentally regardless of whether trade is across a border or not. The main difference is that international trade is typically more costly than domestic trade. The reason is that a border typically imposes additional costs such as tariffs, time costs due to border delays and costs associated with country differences such as language, the legal system or culture. Another difference between domestic and international trade is that factors of production such as capital and labor are typically more mobile within a country than across......

Words: 7774 - Pages: 32

International Trade Simulation and Report

...International Trade Simulation and Report Taruh Cravens, Melody Jones, Geneva George-Williams, Ruby Morgan, Nicole Southerland ECO/212 Blake Bennett International Trade Simulation and Report This paper is a team correlation on the knowledge gained from our course of study and how the concepts are applied, how international trade affects the U.S, economy, and addresses the four key factors from our weekly reading assignments that are shown in the stimulation. The simulation identified Rodamia’s bordering countries provide an opportunity for international trade and investments that could greatly benefit Rodamia. International trade with other countries would give consumers more choices in price and quality of goods. The domestic producers would increase production to meet market demands in other countries, producing more capital for investing in new avenues. The interaction of trade between the countries will make the countries more vibrant and wealthier. Limitations of international trade are placed in the form of tariffs, quotas, and regulations. These limitations offer protection in certain circumstances but can have negative if used to retaliate for reasons such as political differences (Colander, 2004). The simulation emphasized four key points from the team’s weekly reading assignments, including comparative advantage, the principle of increasing marginal opportunity, the protection possibility curve, and limitations on international......

Words: 1571 - Pages: 7

Trade Report

...Overview From September 4, 2013 through November 13, 2013 I participated in an OANDA currency simulation game to enhance my knowledge on international currencies through currency trading. As an individual I started out with $100,000 US dollars, and I traded over $75,000 with more than five different foreign currencies. Also, during the simulation I made over 12 round-way transactions. This report is going to explain the currency concepts I learned over this simulation, my major transactions during the game, and information on the international financial market through this time period. Currency Concepts Before the currency trading began Professor Tang taught about the foreign exchange market. I learned how foreign exchange is an exchange of one currency to another currency, and we need foreign exchange for five major reasons. The five reasons consist of international traveling, international business, international investment and speculation, international financing, and cross-border activities. The foreign exchange market, like I participated in, is usually undertaken in over-the-counter markets, and is the largest financial market in the world with over $3.98 trillion USD turnover a day. This game taught me about why/how individuals participate in currency trading. In order to exchange the different currencies, I had to learn the quotations for them. A foreign exchange quotation is a statement of willingness to buy/sell at an announced rate. There......

Words: 1983 - Pages: 8

International Trade Simulation

...International Trade Simulation Student January 22, 20xx XECO/212 This is a report for the President of Rodamia to discuss the advantages and the disadvantages of international trade between Rodamia and the surrounding countries around Rodamia. This report is also going to discuss the absolute and comparative advantage. Based on the information from this report, there is going to be a possible recommendation to the President of Rodamia whether or not to trade internationally. There are times international trade becomes very important and vital to a countries economy because most economies operate on the basic economic principal of supply and demand. It is not possible for every country’s domestic supplier to meet the domestic demands of that country and when this happens, that country can opt for international trade. Many countries chose international trade because their domestic suppliers are not able to produce the goods that can be brought in from other countries. However international trade has advantages and disadvantages. One advantage of international trade is that Rodamia could import goods that are made more efficiently by other countries. Our domestic suppliers may not have the equipment or man power to make certain goods and trading internationally allows Rodamia to give its consumers more options at lower prices. By allowing other countries to trade with Rodamia, this allows domestic suppliers to create goods and have excess......

Words: 1177 - Pages: 5

International Trade Simulation and Report

...International Trade Simulation and Report The advantage of international trade is countries with certain quantity, quality, and efficient production of goods and services can maximize their country’s wealth. Developing country’s increase sales and revenue through production expansion. International trade increases a country’s gross domestic product (GDP) by increasing the production of products sold to other countries. The free trade agreement between Rodamia, Uthania, and Suntize allowed each country to more efficiently use their resources to increase wealth through the comparative advantage of their export commodity. The flipside of international trade is another country’s ability to produce an export more efficiently than the importing country, causing domestic producers and firms to lose revenue or the opportunity for additional revenue. For example, if Rodamia continues a free trade agreement with Uthania for imports of corn, Rodamia misses the opportunity to become a large producer and net exporter of corn – hurting domestic producers and firms. To counteract the loss of increase revenue for domestic producers and firms, the Rodamia government can impose a tariff – place a tax on the corn or limit the amount of corn imported from Uthania – a quota. The government placing a tariff or quota on corn imported from Uthania protects domestic producers and firms from cheaper imports of corn and affords time to develop......

Words: 1574 - Pages: 7

International Trade

...International Trade ECO/212 Introduction International trade has truly expanded to encompass most of the world over the past century. The countries of the world have seen that everyone can benefit from specializing in the production of a certain good or set of goods and by having skilled workers that provide services to others. This trade off in strengths and weaknesses help get some commodities to locations that would otherwise be unable to attain goods or services that they need. The world of trading between countries is ever changing with the advancement in technology that becomes available to countries. Pros and Cons of International Trade The importing and exporting of goods across the globe is regulated by the World Trade Organization (WTO). This, like many other organizations have multiple benefits and drawbacks for the parties involved beyond practical application of rules and policies. One major benefit of the WTO is that they allow for trading on neutral ground allowing neither of the parties involved to obtain an unfair advantage during the trade agreement process. Any disputes that arise between two or more trading parties are also handled by the WTO which is also a benefit of having the organization in place. The organization itself acts as a mediator or referee of sorts when it comes to the process of trade between nations across the globe. This type of organization also has drawbacks when it comes to certain real world application in certain......

Words: 1719 - Pages: 7

International Trade Simulation

...International trade debate The strength of the dollar on domestic and global economy is very tangible throughout the world but it needs to be that way because a strong dollar could hurt exports into other countries and the U.S also, a strong dollar makes exports from the U.S more expensive to foreign consumers and buyers. The high tariffs and quotas that the United States uses to restrict trade with foreign countries are put in place to limit or restrict products and produce that enter the U.S. Tariffs and quantities restrictions (commonly known as import quotas) both serves the purpose to control the amount of foreign products that enter the domestic markets to be sold to consumers and buyers many countries can’t afford a weak dollar because the strength of the dollar versus the currencies of chronic surplus countries may be counterintuitive.. Tariffs are taxes that are levied on imported goods that enter country from other countries for example a major manufacturing companies that do a lot of business in different countries such as John Deere could see their sales fall by a stronger dollar and the U.S economy would need to increase their international sales to make up for restrained domestic spending a stronger dollar will result in a major loss in international sales and also constrain the U.S. GDP growth. The benefits from tariffs and quotas that are put in placed on countries to restrict their imports, sometimes they impose these quotas and sometimes they impose......

Words: 382 - Pages: 2

Trade Simulation

...Fine Lines to a Formidable Outcome Ali Gebhardt LAW/421 April 27, 2015 Walter Pence Fine Lines to a Formidable Outcome International transactions can be both complicated and beneficial for all involved parties. Any time companies and ultimately persons from different cultures enter into a legally binding business contract, many factors must be taken into consideration. These factors include but are not limited to religious tradition, current state of the governing parties, language barriers, differing ethical standards and understanding of legalities surrounding the given type of business exchange that is to take place. If after entering into a legal contract the terms are breached certain steps need to be taken. One of the most formidable avenues that may lead to greater communication and less legal jargon and confusion is arbitration. Arbitration allows a third party to enter into the discussion and provide unbiased and informed solutions that may benefit all parties involved in the breach of contract dispute. In the simulated scenario I chose of arbitration, removal of suspensions and sublicensing of agreements. I believe that a third party can remove unhealthy bias and help present the facts of the situation. I also believe that there are ways to honor traditions and religious practices without punishing workers or hindering production of needed medical supplies. I think that this goes back to knowing the customs of the population that CadMex employs before......

Words: 492 - Pages: 2

Trade Simulation

...capability of a individual or country to produce a good or service with less assets than another country or individual. Comparative advantage is the capacity of an individual or country to manufacture a particular product for a lower opportunity rate than another individual or country. Comparative advantage in the production of cheese can result in a much more constructive balance when it comes to trade for Rodamia. While international trade offers many advantages, there can be several disadvantages as well. The process known as dumping is a limitation of International Trade this occurs when a country elects to sell exported products at a lower cost than it does to its local residents. Romadia was left with two alternatives, whether to impose tariffs, or set a quota on its import products. These alternatives will generate an unfavorable effect since it will cause a shortage and an increase in the cost of the products. The increase in price will lower the demand for the products. As a result, these effects will hinder the company’s growth. Influencing Foreign Exchange Rates Foreign Trade is one of the things that have a strong hold on the way the economy works globally. The one thing that ties the entire world together is the exchange rate by which our currencies are traded. There are many different things that influence the way the exchange rate is modeled. The factors that make the exchange rate what it is are: domestic economic and political conditions, Speculation......

Words: 417 - Pages: 2

Internationale Trade Simulation

...International Trade Simulation xxxxxx XECO/212 x/xx/xxxx xxxxx With international trade simulation this is showing how the international trade is able to function within all countries. With the simulation it provides a short overview of how to implement the trade restrictions within all tariffs. The most important thing is that the simulation is able to provide fundamentals about how you need to negotiate trade agreements. In the Rodamia simulation it is great that with this you’re able to see how all international trades are coordinated. In the Rodamia representative office is the place where all the major business decisions are decided and were all investment policies are born. Inside of the simulation the main guy is that Michael who is the president of Rodamia. Michael presents the image that he is a good businessman and is capable of handling international trade negotiations with other countries. Rodamis is one countries that has a GDP of 4% from there agriculture, and 30% from there poultry and other types of services. The rest of the 66% comes from many different types of services. There is an advantage of international trade. This advantage is that of gaining the cost of principles. Efficiency with comparative advantages is able to allow other countries to be efficient with inputs that they put and also there outputs will be better than if it were done alone. Many of the trade restrictions can be beneficial to countries some of these could be that of quotas,......

Words: 1101 - Pages: 5

International Trade

...Trade Report International trade is one of the best things a country can do for its economy. It creates amazing opportunity for countries to specialize in what they make best after weighing out their opportunity costs, make more money, increase their production, and create relationships with other countries. There are many advantages to international trade but there can also be some disadvantages as well. When a country is making a decision on whether or not they are going to trade internationally, they need to weigh out each advantage and disadvantage with each country they are trading in. Advantages versus Disadvantages As a country is deciding on international trade they need to see what their own opportunity costs are as well as if the country they are doing business with is going to benefit from the trade as well. One thing that needs to be looked at first is the strength one country’s currency against the other. This can create an advantage as well as a disadvantage because if the country’s currency is weak compared to the others than it would better to export and vice versa. One advantage that was found during the simulation was the fact that Rodamia was able to specialize in the production of corn. The production of corn was the largest part of their agriculture. They were also able to specialize in exporting many of their industry specialties because this was also thirty percent of their GDP. With being able to specialize in these areas the country was able to......

Words: 1122 - Pages: 5

Trade Simulation Report

...International Trade Simulation and Report Team B: Kimberly Castillo, Tanya Bell, Elijah B. Gowdy, Derrick Brown ECO/212 June 6, 2012 Instructor, John Holmberg One Advantage and One Limitation of International Trade Advantage and limitation of International Trade, Countries have different quantities, qualities, and cost for resources such as land, labor, capital, and entrepreneurship (University of Phoenix, 2009). International trade is the import and export of these resources between countries. International trade allows countries to distribute their resources more efficiently. Importing and exporting of resources is vital to the economy. A gain from International trading is a price increase or decrease, in the local markets. If it is cheaper to make a good and export the good the importer will gain from trade by getting a good at a better price than what the opportunity cost of it would be. If the market price was higher, a lower price exporter will allow market price to fall and pose a benefit for consumers, in the sense that everyone gains the most with minimal losses in the short run. Four Key Points Emphasized in the Simulation Within the simulation team b has identified four key points that were underlined. First there is what is called dumping. Dumping is the selling of goods and products in other countries at a cost that is lower than the cost of those goods and products in its own country. Another key point identified in the......

Words: 1588 - Pages: 7

International Trade

...International Trade and Stimulation Univerisity of Phoenix Angela Rogers September 2, 2012 The simulation has provide reasons for international trade and helped me to determine which countries that we should trade with, what type of products we should import or export. I will also be able to determine when we should impose trade regulations such as tariffs and quotas. If our country should buy or sell any type of goods or services this is considered trading. International trading is considered really controversial while domestic trading does not have as many problems as international trading seem to have. If you should purchase items that are foreign made products the prices are lower and the quality of the product is better than an item that made in the United States. The practice of internationally trading has caused some companies within the United States to go out of business. This means that the employees that work at the companies will lose their jobs because of businesses closing in the United States. If you should ask most Americans they are in favor of keeping jobs in the United States instead of the jobs going overseas. This means that Americans are in favor of reducing international trading and buying American made products. The change in government policy, inexpensive communication and shipping has increased due to the results of international trading. Governments have changed policies that effect international trading by......

Words: 1051 - Pages: 5

3x05 Viajeros | ซีรี่ย์ แค่บอกว่ารักกัน | Mr Robot