Week 5 Indv Paper ECO/372
What happens when there is a surplus of imports brought into the U.S.?
When the dollar value of goods and services imported into the United States exceeds the dollar value of goods and services exported to other countries from the U.S., it creates what is called a surplus. When there is a surplus of imports that are brought into the United States, a deficit is created from the trade balance that occurs. Having a surplus of desired imports can create a lower price for the U.S. consumer and have a positive effect on the employment rate within the country where the goods were imported from. This has an effect due to the fact it will keep their citizens working. According to “U.S. Consumption Spent on Foreign Imported Goods” (2011), transportation equipment ranks the highest on the list of a huge flow of foreign imports that entered the United States from 2006 to 2010, with energy-related products coming in second. These two major imports were high when the real-estate market was in full gear. When the housing market began to suffer, lending agencies started losing money due to the consumers not being able to afford to pay higher mortgages moving forward.
What are the effects of international trade on GDP, on domestic markets and on university students? Some effects of international trade to Gross Domestic Products (GDP) include the level in which imports and exports are operating, issues dealing with employment, and limits of consumer spending. Higher exports and lower imports may add to the GDP, while lower exports and higher imports contract GDP. These changes usually cause positive and/or negative changes within our economy. When there is a gap between imports and exports and the trading of these types of goods have been decreased, the result is a smaller negative effect on the GDP----allowing the economy to grow (McTeer, 2008).
Trading deficits can also have an impact on consumer spending. When consumer spending is at a higher rate, trading deficit
When the dollar value of goods and services imported into the United States exceeds the dollar value of goods and services exported to other countries from the U.S., it creates what is called a surplus. When there is a surplus of imports that are brought into the United States, a deficit is created from the trade balance that occurs. Having a surplus of desired imports can create a lower price for the U.S. consumer and have a positive effect on the employment rate within the country where the goods were imported from. This has an effect due to the fact it will keep their citizens working. According to “U.S. Consumption Spent on Foreign Imported Goods” (2011), transportation equipment ranks the highest on the list of a huge flow of foreign imports that entered the United States from 2006 to 2010, with energy-related products coming in second. These two major imports were high when the real-estate market was in full gear. When the housing market began to suffer, lending agencies started losing money due to the consumers not being able to afford to pay higher mortgages moving forward.
What are the effects of international trade on GDP, on domestic markets and on university students? Some effects of international trade to Gross Domestic Products (GDP) include the level in which imports and exports are operating, issues dealing with employment, and limits of consumer spending. Higher exports and lower imports may add to the GDP, while lower exports and higher imports contract GDP. These changes usually cause positive and/or negative changes within our economy. When there is a gap between imports and exports and the trading of these types of goods have been decreased, the result is a smaller negative effect on the GDP----allowing the economy to grow (McTeer, 2008).
Trading deficits can also have an impact on consumer spending. When consumer spending is at a higher rate, trading deficit
References: U.S. Consumption Spent on Foreign Imported Goods. (2011). Retrieved from http://www.americawakeup.net McTeer, B. (2008). The Impact of Foreign Trade on the Economy. Retrieved from http://economix.blogs.nytimes.com/2008/12/10/the-impact-of-foreign-trade-on-the-economy/?_r=0 Colander, D. C. (2010). Macroeconomics (8th ed.). Boston, MA: McGraw-Hill/Irwin