Autor: wolfangyl • July 6, 2012 • 992 Words (4 Pages) • 2,602 Views
International Trade and Finance Speech
This paper will discuss the impact of the surplus of imports that are brought into the United States, the effects of international trade to the Gross Domestic Product (GDP), domestic markets, and university students, and how government choices regarding tariffs and quotas affect international relations and trade. Also discussed in this paper will be the foreign exchange rates and how they’re determined along with why imports are not minimized from other countries.
The United States imports many different products from many different countries. Sometimes there is a surplus of these imports. A surplus can be defined as “the amount by which the revenue of a government from taxes, tariffs and other sources exceeds its expenditures” ("Financial dictionary," 2010). The United States can export the surplus of imported products to another country and make a profit. This is called a trade.
In 2009, “the United States gained a net $2.0 billion in 2009 from direct agricultural trade” ("Economic research service," 2011). The surplus of agricultural goods provided the United States with an export opportunity to bring in more revenue for the country. The surplus of goods allows businesses to have more products to offer consumers which in turn, lower the price of the product for consumers. When prices are lower, consumers tend to purchase more. The increase of purchases brings in more revenue for businesses, more money from sales taxes, and creates movement of money.
When a country is open to international trade, its GDP is affected by its exports and imports. Countries try to achieve a trade balance or equality between imports and exports. “If a country exports too much, it may not be able to support its domestic needs, while a country which imports excessive amounts of products may not have enough money to support the high volume of imports” ("What is the," 2012). If the country does not have enough money to support the volume of imports, this could negatively affect the GDP. International trading helps the government to earn income from foreign nations.
Domestic markets are made up primarily by manufacturers, wholesalers, and retailers. The size of the domestic market is measured by GDP. There may be more of a demand for a product through a domestic market, for example, the American flag, which may sell better in America and Canada than in countries across the ocean. The laws and regulations are more well-known and allow for payments to be clear and prompt.
The effects of international trade on university students is the cost of products students use to achieve their education. In a domestic market, computers that are produced within the country of the university student may cost less than computers that are imported from a different country. This is because there are less regulations,