International Trade Simulation
The simulation is assigned to familiarize one with the tools of International trade that government uses to keep economy moving ahead. I was introduced to the theory of comparative advantage and the impact of tariffs, quotas, and dumping on international trade. I will evaluate the country's products to produce within the country and what products to import based on the Production Possibility Frontier (PPF). I will also make decisions pertaining to tariffs and quotas. This simulation also introduces the usage of free trade agreements.
Protecting a developing domestic industry from competition from abroad and creating trade agreements that reduce trade barriers among countries generally lead to increased benefits for all countries.
Four Key Points
The usage of Absolute advantage, dumping margin, production possibility frontier (ppf), and tariff was four key points explained.
Apply simulation to real world
As state and local governments expand efforts to promote economic development, A more successful approach to economic growth may involve international trade in order to better provide essential public services.
The simulation shows how. The basis for international trade is comparative advantage. Countries tend to specialize in products they have comparative advantages in. By exporting these products to other countries they have a comparative advantage from producing them.
Growing Further results for the assessment
Print outs attached.