1. The relation between trade and world output:
Trade output is affected by world output, in a supply and demand type of relationship. If the world output is low in any given year, then the trade output will be low as well. In times of economic recession, or catastrophe for that matter, people will not purchase as many products as they would if comfortable about their financial and personal future. Also, if in times of recession, a country's currency may be weakened in value, making imports from other countries much more expensive. (Wild, Wild, Han. 2005, Ch.5)
2. Describe the broad pattern of international trade:
Trade patterns are viewed by examining trade and world output, providing insight on trade patterns and possible future growth. Unfortunately, it does not define who is trading with whom in terms of high-income, and low-income nations. Through the sometimes misleading, although informative records from customs agencies, we know that trade between wealthy economies, such as Western Europe, makes up for 60% of world trade, High to mid and low income nations is at approximately 34%, while low to low trade is at about 6%.
3. If nations of the world were no longer trading, what products might you no longer obtain? Choose one other country and identify the products it would have to do without.
Products that we as Americans might no longer obtain could include, rice, coffee, and other foods such as bananas, mangoes, papayas, and other tropical fruits. We might also, for at least a while, lose such products as electronics, appliances, and even clothing. According to Osio International, an import company, 90% of U.S. clothing is imported from other countries. (www.osiopack.com, 2005)
Wild, John., Wild, Kenneth., Han, Jerry. International Business. 2nd Ed. (2003). Pearson Prentice Hall.