International Trade and Finance Speech

...

rate between the Japanese yen and the U.S. dollar is 104 yen equals 1 dollar. Moffatt (2014), “The supply of a currency on a foreign exchange market is determined by the following: Demand for goods, services and investments priced in that currency. For example, if you wanted to purchase bonds in a foreign currency or purchase a product in a foreign country you will need to use the respective currency i.e. yen would be needed in Japan. If total expenses by non-Japanese citizens rise the demand for Japanese currency will rise. Other factors such as interest rates, inflations, GDP, and unemployment plays a factor into currency rating as well. These things effect the economy and the economy is driven by money.

China

If the U.S restricted all goods from China inflation may rise in the U.S. and China’s economy may collapse. According to Forbes China is 175.6% dependent on the U.S. (Chang, 2014). China has billions of dollars in trade surplus from conducting business with the U.S. China is helping keep the value of the American dollar high as well as providing revenue to America’s GDP. If America restricted China or limited other countires on imports this may cause prices of goods and services to rise in America. Labor in America is more costly then labor in many foreign countries especially third world countries or underdeveloped countries. The labor and goods in America could be 10 times as expensive. For example a sneaker that once cost $80 dollars may now cost $160 because it cost more to make the product locally. The U.S. uses imports from other countries to help stimulate the economy. If the U.S. were to limit other countries from importing it would limit them from spending their money in the U.S. economy as well.

Conclusion

I have discussed the how imports, trades, and the GDP effects the economy. This served as an introduction to macroeconomics and how different factors influence international trade and the how currency flows back and forth.

References

Amaedeo, K. (2014). The U.S. Trade Deficit. Retrieved from http://useconomy.about.com/od/tradepolicy/p/Trade_Deficit.htm

Chang, G. (2014). China Is 175.6% Dependent on the U.S.. Retrieved from http://www.forbes.com/sites/gordonchang/2012/01/22/china-is-175-6-dependent-on-the-u-s/

International Business and Trade. (2014). Retrieved from http://www.basiceconomics.info/international-business-and-trade.php

Mcteer, Bob. (2014). The Impact of Foreign Trade on the Economy. Retrieved from http://economix.blogs.nytimes.com/2008/12/10/the-impact-of-foreign-trade-on-the- economy/?_php=true&_type=blogs&_r=0

Moffatt, M. (2014). What Determines an Exchange Rate. Retrieved from http://economics.about.com/od/purchasingpowerparity/p/exchange_rate.htm