Introduction

Issues concerning a nation's ability to trade freely with other nations can often evoke emotional discussions in economics. These emotions run high as people see many items in stores made in foreign countries. For those against international trade, the discussion quickly centers on Americans losing their jobs. Competition is tough because of differences in standards of living, differences in wages, varying government regulations, and government subsidies of certain industries. Those in favor of free trade will point to the many products available to consumers at affordable prices.

This lesson will focus on why nations trade, how and why some nations protect their domestic industries, and who the winners and losers are when it comes to opening or limiting trade between nations.

 

 

 

Lesson Objectives

Following successful completion of this lesson, students will be able to:

  • explain the arguments for those people who are for or against free world trade.
  • identify the winners and losers when there is an open economy or a closed economy.
  • describe the difference between a tariff and a quota.
  • describe the purposes of NAFTA, GATT and the WTO.

The above objectives correspond with the Alabama Course of Study: Economics objectives: 12, 12.5, 12.6.

 

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