Topic 10 · macro
International Trade
Countries trade because together they produce more than alone — through specialization.
Why trade
Comparative advantage: a country specializes in what it produces at a lower opportunity cost and then exchanges. Overall, everyone gains.
Barriers
Tariffs (duties) and quotas protect domestic producers, but raise prices for buyers and reduce the overall gain.
Exchange rate
The price of one currency in another. It affects export and import prices; a weaker currency makes exports cheaper.
🎯 Now possible
- explain comparative advantage
- name the barriers to trade
- understand the role of the exchange rate
Cheat sheet
Trade gains come from specialization
Comparative advantage = lower opportunity cost
Tariffs/quotas protect but raise prices
A weak currency → cheaper exports
Practice on this topic
Where to read more: Мэнкью — гл. 9, 32