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Economy

CHAPTER 5
Introductory Issues
Table of Contents
5-1
5-2
5-3
5-4
5-5 The International Economy
What is International Economics?
Brief Outline
Some Trade Terminology
Valuable Lessons of International
Trade Theory

5-5A
5-5B
5-5C
5-5D
5-5E
5-5F Lesson A
Lesson B
Lesson C
Lesson D
Lesson E
Lesson F

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LEVEL 1: Basic Definitional
LEVEL 2: Basic Intermediate
LEVEL 3: Advanced Intermediate
LEVEL 1
Jeopardy T 5-1
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The International Economy
International economics is growing in importance as a field of study because of the rapid integration of international economic markets. More and more, businesses, consumers and governments realize that their lives are increasingly affected, not just by what goes on in their own town, state or country, but by what is happening around the world. Consumers can buy goods and services from all over the world in their local shops. Local businesses must compete with these foreign products. However, these same businesses also have new opportunities to expand their markets by selling in a multitude of other countries. The advance of telecommunications is rapidly reducing the cost of providing services internationally and the internet will assuredly change the nature of many products and services as it expands markets even further than today.
Markets have been going global, and everyone knows it.
One simple way to see this is to look at the growth of exports in the world during the past 50+ years. The following figure shows overall annual exports measured in billions of US dollars from 1948 to 2005. Recognizing that one country's exports are another country's imports, one can see the exponential growth in trade during the past 50 years.