Economic Standards
Trade
SS7E9 The student will explain how voluntary trade benefits buyers and sellers in Southern and Eastern Asia. a. Explain how specialization encourages trade between countries. b. Compare and contrast different types of trade barriers, such as tariffs, quotas, and embargos. c. Explain why international trade requires a system for exchanging currencies between nations.
Specialization has strongly encouraged trade in Southeast. For example, Japan specializes in seafood, but does not have coal. Then Japan can trade their Seafood to China or and will coal in return.
There are 3 types of trade barriers, a quota, tariff, and embargo. A quota puts a limit on an item being exported or imported. A tariff is a tax on imported goods. A embargo is a restriction of trade on a country, usually to get a country to change their ways. Currency exchange is very important to trading. For example, if Iraq wants to trade with Saudi Arabia, they will need to exchange currencies with each other. |