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Week 6 – Discussion Forum 2

Required Resources

Text

Gwartney, J. A., Stroup, R. L., Sobel, R. L., & Macpherson, D. A. (2018). Macroeconomics: Private and public choice (16th ed.). Retrieved from https://www.cengage.com

  • Chapter 18: Gaining from International Trade
  • Chapter 19: International Finance and the Foreign Exchange

 

Recommended Resources

Text

Tamny, J. (2015). Popular economics: What the Rolling Stones, Downton Abbey, and LeBron James can teach you about economics. Retrieved from https://www.redshelf.com

  • In Chapter 18 Tamny provides his perspective on global trade and its impacts. This chapter may assist you with your International Trade and Balance of Payment discussion forum question this week. In Chapter 23, Tamny provides his support to the economist Hayek as to why government intervention is not necessarily helpful. This chapter may assist you with your Cases: Applying Economics to the Real World Final Project.
    • Chapter 18: Conclusion: Free Trade is the Path to Knowledge, Liberty, World Peace, and Big Raises
    • Chapter 23: Conclusion: “Do Nothing” Politicians Deserve a Special Place in Heaven

Articles

Horan, P., Wise, I., & Horan, T. (2019). The U.S. social security system: How it works, its financial situation, and the short-changed benefits paid to the most vulnerable. Review of Business, 39, 15–28. Retrieved from https://www.stjohns.edu/

  • The full-text version of this article is available through the EBSCOhost database in the Ashford University Library. This article discusses social security in detail, giving many statistics. The article will give you an up-to-date view of the program as well as some potential issues. The detailed background may help you form a proposal for your Cases: Applying Economics to the Real World Final Project.

Hosansky, D. (2016, June 3). Social security: Is the program running out of money? CQ Researcher, 26, 481–504. Retrieved from http://library.cqpress.com/

  • The full-text version of this article is available through the CQ Researcher database in the Ashford University Library. This detailed article gives a brief history on social security and discusses upcoming issues with the program. The article discusses the privatization option that some politicians tout. This article may assist you with your Cases: Applying Economics to the Real World Final Project.

Karaim, R. (2018, March 30). U.S. trade policy. CQ Researcher, 28, 269–292. Retrieved from http://library.cqpress.com/

  • The full-text version of this article is available through the CQ Researcher database in the Ashford University Library. This article presents an in-depth view of why the current administration does not like trade deficits. President Trump would like to restore manufacturing jobs by increasing tariffs and thus reducing trade deficits with China. This goes against most economists’ views and years of U.S. global policies. The article discusses the trade deficit in detail giving the pros and cons. This article may assist you with your International Trade and Balance of Payment discussion forum this week.

Procon.org. (2018). Social Security. ProCon. Retrieved from https://search-credoreference-com

  • The full-text version of this article is available through the Credo Reference database in the Ashford University Library. This factual article lays out the pros and cons of social security and provides potential alternatives to the existing program. The article may help you form a proposal for your Cases: Applying Economics to the Real World Final Project.

Rodrik, D. (2017, October 20). The trouble with globalization (Links to an external site.). Milken Institute Review. Retrieved from http://www.milkenreview.org/articles/the-trouble-with-globalization

  • This article provides a different view on globalization as compared to your textbook. The article recognizes the benefits of a global economy but takes a step back to look at both the winners and losers from a global market. The article touches on current political rhetoric and impact on workers. This is an interesting article to give you a different perspective and may assist you with you International Trade and Balance of Payment discussion forum this week.
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Shostak, F. (2017, March 13). Balance of payments and the exchange rate: Is there a connection? (Links to an external site.) Retrieved from https://www.cobdencentre.org/2017/03/balance-of-payments-and-the-exchange-rate-is-there-a-connection/

  • This article challenges conventional thinking that the balance of payments influences currency rates by stating that the key factor behind the rate of exchange determination is the relative purchasing power of various monies. This article may assist you with your International Trade and Balance of Payment discussion forum this week.
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Stern, R. M. (2019). Balance of payments. World Book Advanced. Retrieved from https://www-worldbookonline-com

  • The full-text version of this article is available through the World Book database in the Ashford University Library. This short article provides information on how the balance of payment impacts a country’s currency rate. This article may assist you with your International Trade and Balance of Payment discussion this week.

Tankersley, J. (2018, March 5). Trump hates the trade deficit. Most economists don’t. The New York Times. Retrieved from https://www.nytimes.com

  • The full-text version of this article is available through the Business Insight: Global database in the Ashford University Library. This article provides a different view on globalization as compared to your textbook. The article discusses why President Trump is against U.S. trade deficits and how he is using tariffs to gain more balance. This article may assist you with your International Trade and Balance of Payment discussion forum this week.

Multimedia

Heimler, S. [Steve Heimler]. (2018, November 28). The exchange rate and the foreign exchange market [AP macroeconomics explained] (Links to an external site.) [Video file]. Retrieved from https://youtu.be/JsKLBpy6cEc

  • This video provides an explanation of the exchange rate for currency in the foreign exchange market. In turn, the exchange rate explains why in a country’s balance of payments account the sum of the financial account and the current account must equal zero. This video may assist you with your International Trade and Balance of Payment discussion forum this week. This video has closed captioning and a transcript.
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INSTRUCTION
Prior to beginning work on this discussion,

  • Read Chapters 18 and 19 of Macroeconomics: Private and Public Choice.

In Chapter 9 you were introduced to the terms trade deficit and trade surplus. In Chapter 19 your view of imports and exports was expanded to include the balance of payments. As part of the balance of payment calculation, trade deficit or trade surplus is called balance on goods and services (p. 396, exhibit 5, line 7). Business news commonly use the term trade deficit to discuss the U.S. economy rather than your textbook’s favored term, balance on goods and services. The trade deficit or trade surplus (p. 396, exhibit 5, line 7) has the biggest impact on the current account.
Politicians often warn us about the problems of the US having a trade deficit. For this discussion, cordially debate whether the US should be concerned about our trade deficit.
For your initial post, first discuss how the balance of payments can influence exchange rates and purchasing power. Then take a position either for or against trade deficits. In your position, address the pros and cons of the U.S. trade deficits. There are many supplemental resources available to assist you with this debate.
Your initial response should be a minimum of 200 words. Graduate school students learn to assess the perspectives of several scholars. Support your response with at least one scholarly and/or credible resource in addition to the text.