International Trade & Finance Essay

820 WordsApr 22, 20134 Pages
Hello and Welcome. Today we are going to talk about the current state of the United States macro-economy. Let’s get started by defining real gross domestic product. Real domestic product is the output of goods and services produced by labor and property located in the United States. In our current economy, consisting of 4 annual quarters, we can see that real gross domestic product has increased at an annual rate of 0.1 percent in the fourth and final financial quarter of 2012 according to the "second" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP, or gross domestic product increased 3.1 percent. Besides GDP, our national economy is greatly dependent upon International Trade & Finance. What happens when there is a surplus of imports brought into the U.S.? When we think about supply and demand we can determine that a surplus of imports brought into the US is likely to drive demand and prices down on both the international and domestic goods. This is not likely a good scenario for imports as price paid is most likely not what will be recovered through reductions in price required to move the product to consumers. We see this in import auto business as a surplus creates an over inventory situation where prices are reduced making a deal for consumers but a loss for resale industries. Having a surplus of imports is also not good for domestic products as the import supply throws off a target balance that is best maintained to support gross domestic product and associated dependencies such as employment. However, it can be argued that a surplus of imports can boost employment as it creates distribution, retail and transportation job opportunities which in return are a boost to economy. What are the effects of international trade to GDP, domestic markets and university students? According to economywatch.com (June

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