International Trade Simulation Essay Sample

List at least one advantage and one restriction of international trade you encountered in the simulation.

Define absolute and comparative advantage in your ain words.

Explain how absolute and comparative advantages were used in your simulation.

Describe the influences impacting foreign exchange rates.

Dear President Jacobs.
My recommendations for international trade would be to be careful how high we make duties when covering with the other states. If we raise them excessively high we could lose gross which means we will besides lose money. If our neighbours can non afford to pay the cost of the duties so they may take to halt trade with us wholly or buy less from us so before. I besides would urge that we have a quota so that we are non importing or exporting more than we can afford to so that we are non losing money that manner as good. We may necessitate to open free trade understandings at times every bit good in order to maintain trade with our neighbours traveling. If we keep trade traveling with our neighbours all of the states involved will profit.

In this simulation one advantage I came across was fee trade understandings. I feel that free trade understandings are good to all states involved. It keeps trade unfastened for the states involved which can better the economic system of those states. Free trade besides allows those states involved to merchandise openly without concern of high duties that will be them more than they can afford.

In this simulation one restriction I came across was the fact that if we raise the duties excessively high so the other states may non be able to afford to merchandise with us and we could lose out on both gross every bit good as money that trade could convey us. We need to be careful how much we raise it and when we raise it so that the other states can afford to pay the higher duties and that the rise in monetary value benefits our state in the terminal. We do non desire higher duties if they are non traveling to profit us by conveying in more money for our economic system.

Absolute advantage is the ability of our state to bring forth certain goods or services at a lower cost to us than any other states that produce these goods and services.
Comparative advantage is the ability of our companies to bring forth certain goods and services at a lower chance cost than other companies. This gives our companies the ability to sell these goods and services at a lower monetary value than our rivals.

Absolute advantage was used in the simulation when we had a roar in maize production. Having the sum of maize that we did do it so that we could bring forth goods made of maize at a lower cost than our neighbours could. This helped our state convey in more money for the economic system from merchandising maize to our neighbours.

Comparative advantage was used in the simulation when we