Question

Provide a 300-plus word description of each topic:

The main reason for international trade, what gains derive from it, the conditions of the U.S. balance of payments, aspects of terms of trade, the main trade barriers and efforts to eradicate them, the arguments for protectionism and a comparison of the latter to the pros/cons of free trade; use graphs, formulas and examples to support your findings. Also address international finance, the evolution of the exchange systems, what affects currency rates and how those in turn influence prices, output and trade flows. Conclude with your outlook on the u.S. trade balance.

Answer 1

International Trade refers to the exchange of products and services from one country to another. In other words, imports and exports

The balance of trade influences currency exchange rates through its effect on the supply and demand for foreign exchange. When a country's trade account does not net to zero—that is, when exports are not equal to imports—there is relatively more supply or demand for a country's currency, which influences the price of that currency on the world market.Currency exchange rates are quoted as relative values; the price of one currency is described in terms of another. For example, one U.S. dollar might be equal to 11 South African rand. In other words, an American business or person exchanging dollars for rand would buy 11 rand for every dollar sold, and a South African would buy $1 for every 11 rand sold.