Transcript Document 7790928

Trade as a Percent of GDP
60%
50%
World
40%
30%
United
States
20%
10%
0%
1965
1970
1975
1980
1985
1990
1995
2000
Year
Figure 13.1 Trade Expressed as a Percentage of Production, World and United States, 1965-2003
Buyers of U.S. Exports
Canada
Mexico
Japan
China
United Kingdom
Germany
South Korea
Figure 13.2
Top Purchasers
of Goods from the
United States
and Suppliers
of Goods to the
United States, 2005
Netherlands
France
Taiwan
0
50
100
150
200
250
300
0
50
100
150
200
250
300
Sellers of Imports to the U.S.
Canada
China
Mexico
Japan
Germany
United Kingdon
South Korea
Taiwan
Venezuela
France
Billions of U.S. Dollars
Quantity of Wine
Figure 6.3
Portugal’s Production Possibilities Frontier
200
C
A (desired consumption)
100
0
50
100
Quantity of Cloth
Figure 13.3 Portugal’s Production Possibilities Frontier
Quantity of Wine
Figure 6.4
England’s Production Possibilities Frontier
200
B (desired
consumption)
100
D
0
100
200
300
400
Quantity of Cloth
Figure 13.4 England’s Production Possibilities Frontier
Table 13.1 Production, Exchange, and Consumption of Wine and Cloth
Production
Wine
Cloth
Portugal
200
0
England
0
400
Total
200
400
Portugal
sell 100
buy 100
England
buy 100
sell 100
Portugal
100
100
England
100
300
Total
200
400
Exchange
Consumption
Table 13.2 Opportunity Cost and Comparative Advantage
Country
Opportunity Cost of 1
Unit of Cloth
Opportunity Cost of 1
Unit of Wine
Portugal
2 units of wine
½ unit of cloth
England
½ unit of wine
2 units of cloth
Euros
per
Dollar
S
E
D
Quantity of Dollars
Figure 13.5 A Foreign Exchange Market
Euros
per
Dollar
S1
S2
E1
Depreciation
of the dollar
E2
D
Quantity of Dollars
Figure 13.6 A Supply Shift in a Foreign Exchange Market
Table 13.3 United States Balance of Payments Account (2005, Billions of Dollars)
Balance of Payments
0
Balance on Current account
-792
Inflows:
1,750
Payments for Exports of Goods
895
Payments for Exports of Services
381
Income Receipts
475
Outflows:
-2,541
Payments for Imports of Goods
-1,677
Payments for Imports of Services
-315
Income Payments
-463
Net transfers
-86
Balance on Financial account
Outflows
(e.g., U.S. lending abroad, or FDI abroad)
Inflows
(e.g., U.S. borrowing from abroad, or FDI in the U.S.)
Statistical discrepancy (and "capital account")[1]
785
-427
1,212
6
Percent of GDP
18%
Imports
16%
14%
12%
Exports
10%
8%
6%
4%
2%
0%
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Year
Figure 13.7 U.S. Imports and Exports of Goods and Services, 1950-2005
Units of
foreign
exchange
per unit of
domestic
currency
surplus
Smarket
e*
Dwith intervention
Dmarket
Quantity of the domestic currency
Figure 13.8 Foreign Exchange Intervention