By the end of this section, you will be able to:
Define absolute advantage, comparative advantage, and opportunity costs
Explain the gains of trade created when a country specializes
By the end of this section, you will be able to:
Identify at least two advantages of intra-industry trading
Explain the relationship between economies of scale and intra-industry trade
By the end of this section, you will be able to:
Explain tarrifs as barriers to trade
Identify at least two benefits of reducing barriers to international trade
By the end of this section, you will be able to:
Show the relationship between production costs and comparative advantage
Identify situations of mutually beneficial trade
Identify trade benefits by considering opportunity costs
By the end of this section, you will be able to:
Predict shifts in the demand and supply curves of the labor market
Explain the impact of new technology on the demand and supply curves of the labor market
Explain price floors in the labor market such as minimum wage or a living wage
By the end of this section, you will be able to:
Identify the demanders and suppliers in a financial market
Explain how interest rates can affect supply and demand
Analyze the economic effects of U.S. debt in terms of domestic financial markets
Explain the role of price ceilings and usury laws in the U.S.
By the end of this section, you will be able to:
Apply demand and supply models to analyze prices and quantities
Explain the effects of price controls on the equilibrium of prices and quantities
By the end of this section, you will be able to:
Explain the meaning of trade balance and its implications for the foreign exchange market
Analyze concerns over international trade in goods and services and international flows of capital
Identify and evaluate market-oriented economic reforms
By the end of this section, you will be able to:
Identify the causes and effects of inflation in various economic markets
Explain the significance of a converging economy
By the end of this section, you will be able to:
Explain the nature and causes of unemployment
Analyze the natural rate of unemployment and the factors that affect it
Identify how undeveloped labor markets can result in the same hardships as unemployment
By the end of this section, you will be able to:
Analyze the growth policies of low-income countries seeking to improve standards of living
Analyze the growth policies of middle-income countries, particularly the East Asian Tigers with their focus on technology and market-oriented incentives
Analyze the struggles facing economically-challenged countries wishing to enact growth policies
Evaluate the success of sending aid to low-income countries
By the end of this section, you will be able to:
Analyze GDP per capita as a measure of the diversity of international standards of living
Identify what classifies a country as low-income, middle-income, or high-income
Explain how geography, demographics, industry structure, and economic institutions influence standards of living
By the end of this section, you will be able to:
Discuss the relationship between bank regulation and monetary policy
Explain bank supervision
Explain how deposit insurance and lender of last resort are two strategies to protect against bank runs
By the end of this section, you will be able to:
Explain the reason for open market operations
Evaluate reserve requirements and discount rates
Interpret and show bank activity through balance sheets
By the end of this section, you will be able to:
Contrast expansionary monetary policy and contractionary monetary policy
Explain how monetary policy impacts interest rates and aggregate demand
Evaluate Federal Reserve decisions over the last forty years
Explain the significance of quantitative easing (QE)
By the end of this section, you will be able to:
Analyze whether monetary policy decisions should be made more democratically
Calculate the velocity of money
Evaluate the central bank’s influence on inflation, unemployment, asset bubbles, and leverage cycles
Calculate the effects of monetary stimulus