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Explain why nations trade
Assessment Strategies
Oral, written, and/or graphic assessment
Criteria
Define international trade and globalization
Describe the history of international trade
Analyze the economic rationale for international trade
Explain some fallacies of international trade
Examine arguments for and against international trade
Define absolute and comparative advantage
Distinguish between absolute and comparative advantage using numerical examples
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Explain why specialization and trade increases output (income)
Assessment Strategies
Oral, written, and/or graphic assessment
Criteria
Calculate the increase in output from specialization and trade
Explain the increase in output from specialization and trade
Explain the production possibilities with and without trade
Graph the production possibilities curve with and without trade
Describe the Heckscher-Ohlin (Factor Endowment) theory
Discuss trade patterns using the Heckscher-Ohlin theory
Perform appropriate calculations demonstrating the Heckscher-Ohlin theory
Analyze various sources of comparative advantage
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Analyze the effects of international trade on trading partners
Assessment Strategies
Oral, written, and/or graphic assessment
Criteria
Explain the effects of trade on input and output markets in importing and exporting economies
Calculate the effects of trade on input and output markets in importing and exporting economies
Explain the Stolper-Samuelson theorem using examples
Discuss the relationship between industry structure and trade
Explain trade using additional trade theories such as overlapping demand theory
Define terms of trade
Use numerical examples to explain terms of trade
Explain the relationship between trade and economic growth
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Evaluate the effects of tariffs
Assessment Strategies
Oral, written, and/or graphic assessment
Criteria
Define tariffs
Distinguish between the different types of tariffs using numerical examples
Explain the effects of tariffs on producers and consumers in importing and exporting countries
Calculate the effects of tariffs on producers and consumers in importing and exporting countries
Define consumer surplus, producer surplus, and deadweight loss
Calculate and graph consumer surplus, producer surplus, and deadweight loss
Use consumer surplus and producer surplus to illustrate the welfare effects of tariffs
Analyze the welfare effects of tariffs on small versus large nations
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Evaluate the effects of non-tariff trade barriers
Assessment Strategies
Oral, written, and/or graphic assessment
Criteria
Define various non-tariff trade barriers such as quotas, subsidies, voluntary export restraints, domestic content requirements, dumping, countervailing duties, industrial policies, …
Discuss specific examples of non-tariff trade barriers
Explain the effects of non-tariff trade barriers on producers and consumers in exporting and importing countries
Use numbers and graphs to explain the welfare effects of non-tariff trade barriers
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Summarize the role of major international economic institutions such as the World Trade Organization, the World Bank, and the International Monetary Fund
Assessment Strategies
Oral, written, and/or graphic assessment
Criteria
Define major international economic institutions such as the World Trade Organization, the World Bank, and the International Monetary Fund
Summarize the history behind the creation of the major international economic institutions
Explain major functions of international economic institutions including relevant examples
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Explain the role of regional trade agreement in international trade
Assessment Strategies
Oral, written, and/or graphic assessment
Criteria
Define regional trade agreements
Provide relevant examples of regional trade agreements
Distinguish between different types of regional trade agreements
Use numerical or graphical examples to explain the welfare effects of regional trade agreements
Explain the differences between static and dynamic welfare effects of a regional trade agreement
Use a graph to illustrate the areas represented by trade creation and trade diversion under a regional trade agreement
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Explain the relationship between a country's trade position and the international flow of funds
Assessment Strategies
Oral, written, and/or graphic assessment
Criteria
Define the balance of payments of a nation
Use numerical examples to show the components of the balance of payments of a nation
Distinguish between credit or debit items on the balance of payment of a nation
Define current and capital accounts
Use appropriate examples and calculations to explain components of current and capital accounts
Discuss the implications of trade balance for the international flow of funds
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Explain the major factors affecting currency exchange rates
Assessment Strategies
Oral, written, and/or graphic assessment
Criteria
Define foreign exchange rates
Describe the different types of exchange rates
Explain the major determinants of demand and supply of a foreign currency
Discuss the impact of a change in demand or supply of a foreign currency on the price of the foreign currency
Describe different ways banks, companies, or individuals try to profit from foreign exchange markets
Describe different ways to manage foreign exchange risk
Summarize the role of domestic and foreign interest rates in the exchange markets
Define purchasing power parity
Explain the role of purchasing power parity in determining long-run exchange rates
Describe the different types of exchange rate systems
Explain how governments maintain fixed exchange rates
Discuss the Bretton Woods system and why it collapsed
Apply foreign exchange concepts to relevant current events
Discuss currency crises using relevant examples
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Determine the macroeconomic effects of current and historical events in an open economy
Assessment Strategies
Oral, written, and/or graphic assessment
Criteria
Define aggregate demand and aggregate supply
Review the major determinants of aggregate demand and aggregate supply
Analyze the macroeconomic equilibrium in terms of the domestic product market, the money market, and the foreign exchange market
Explain the macroeconomic equilibrium output, interest rates, and exchange rates when all three markets are in equilibrium
Discuss the implications of current and historical events on a country's macroeconomic position
Examine the effects of fiscal policy and monetary policy in an open economy
Examine the effects of fiscal policy and monetary policy in an open economy with floating exchange rates
Examine the effects of fiscal policy and monetary policy in an open economy with fixed exchange rates