February 13, 2013
International Trade and Finance Speech
The purpose of this paper is to organize a speech that will be provided to a number of reporters that are not knowledgeable with economics. In this paper I will put importance on international trade and foreign exchange rates and how those affect the GDP, domestic markets, and students. I will also outline some of the benefits on goods and services that are imported from other countries and how those contribute to our economy in the United States.
What happens when there is a surplus of imports brought into the US?
When there is a surplus of a product imported into the US, it drives the prices of that particular product down. The reason it drives the prices down is because the owner of the product gets to a point where they need to clear out inventory so they sell it at a price lower than originally expected. These companies will go as far as taking a loss on the product just to clear the inventory. This surplus is a plus for the consumer. (Armadeo, 2013)
Car dealerships are a prime example of companies that clean out old inventory at a reduced price. They run end of year specials that are hard to beat. One dealership had a Chevrolet Malibu for $22,110. The end of year pricing deal they offered was $3000 cash back or 0% interest on a 60 month loan. When deciding which offer is the best, a person must first look at what the percentage of interest is that they would be paying on top of the loan amount. (Mello, 2012)
What are the effects of international trade to GDP, domestic markets and university students?
The international trade effect on the GDP depends on if it is a surplus or deficit. If the imports are lower than exports this will have a positive effect on the GDP, domestic markets, and university students. A positive effect in the GDP increases the job market. This in turn increases money into the economy and... [continues]
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