international economics homework help

international economics homework help

The Impact of International Economics on Global Markets

1. Introduction to International Economics

International economics greatly influence the direction of monetary, fiscal, and trade policies in every country. Businesses in the areas of production and distribution take a more active role in the international market. Improvement in business operations, technology level up, and a secure profit from investment all function as remedies to guarantee prosperity in this age of intense business competition. This suggests that companies with a comprehensive approach and understanding of international economics will enable them to better integrate into international markets. Are there any differences or influences of international economics on perspectives of economic analytics or interpretation compared with micro and macroeconomics? According to Wonnacott, international economics is an economic problem associated not only with basic economics but also with political science, history, and other branches of study familiar to us. International economics encompasses a significant portion of international trade, which is not necessary for microeconomics. Moreover, macroeconomics and international economics are integrally associated with each other, and they are so closely linked that change in interpretation or part of them can influence associated variables or sectors.

Economies of various countries are reciprocally connected, and all nations in the contemporary world are in reality interdependent on each other. This common dependence on each other can be referred to as globalization. One aspect of globalization is international economic interdependence in which one imports raw materials from other countries and exports finished products. Export and import of goods between nations do not focus solely on the barter of commodities. Furthermore, it is not the monetary aspects such as the money exchange rate that determine the trend of worldwide trade and the volume of imports and exports. Instead, the exchange of goods is substantially influenced by the supply and demand of all parties related to international economic transactions, i.e., the commodity, capital, labor, and technology that are widely available in the world. Fluctuations in global economies often result from factors that directly function inside or outside the local economy. Therefore, economic mechanisms in the world are largely identified in terms of international economics.

2. Factors Influencing International Trade

The same reasoning applies at the global level. For instance, Canada exports grains and imports bananas because grains are inexpensive in Canada and expensive in tropical countries, and the Canadian international purchasing power is less important than the Canadian national non-tropical purchasing power. This is also due to the fact that Caribbean islands, for example, cannot produce airplanes and satellites, which are top value components of Canadian imports. Finally, individuals have different skills, and in general, specialized and repeated actions improve skills. Except if particular national or international circumstances explicitly prevent exchanges between nations, trade is not an exception to the rule.

We will now have a look at the fundamental factors influencing international trade. Basically, international trade exists for two reasons. The first reason is the usual social and economic differentiation between individuals and nations, and the well-known division of labor. At the national level, in large societies, extensive wealth differences may arise between categories of individuals such as the farmer, the shopkeeper, large owners, etc., and between different zones of a society. And even small tribes may be forced to exchange any surplus food, meat, drinks, jewelry, clothes, ships, weapons, or slaves and war prisoners they own in order to obtain any product that is not locally available.

3. The Role of Exchange Rates in International Economics

The common use of exchange rates, especially in news reports, securities market monitoring, and general daily foreign exchange conversations, are mainly driven by the fact that exchange rates (or foreign currency equivalents) actually reflect the price of a particular currency in monetary terms, so they can easily be quoted and followed over time, as for other prices, such as the price of a car, rouble, gold, wheat, and so on. Indeed, the price of the dollar today against the ruble is RUB 69.7/$, but it was only RUB 59.6/$ exactly six months before the quote. At the same time, the phrase “The price of the dollar today against the ruble is RUB 69.7/$” creates a completely different image and gives much more information than the phrase “The price of the dollar today against the ruble of the USA is RUB 69.7/$”.

The Role of Exchange Rates in International Economics. The term “exchange rates” is more familiar to the general public, and indeed that person on the street is likely to know “exchange rates” a bit better than “exchange rate regime” or even “foreign exchange”. As a result, many people confuse “exchange rates” with “foreign exchange” when in fact the right interpretation of “exchange rates” is the price of a country’s currency in terms of a second currency or a key money, mainly referred to as a unit of account or for other specific legal issues, such as US dollars. In fact, “foreign exchange” is an asset class, not a price, and can be much more complex than just an exchange rate (for example, “cross-currency”), although a well-functioning foreign exchange market usually includes transactions in a wide variety of currencies and other financial instruments. Securities and contracts.

4. Global Economic Integration and its Effects

There is an intense debate in the economic literature about the theoretical consequences of an open economy. If the goods market is not fully integrated and there is imperfect competition, a higher productivity in the domestic goods market may decelerate, the expansion of domestic firms in the foreign market. On the other hand, typical trade models posit that economic integration should lead to a more competitive environment as it stimulates firms to export, to get a larger market share, and to achieve economies of scale at export. As one may expect, the theoretical predictions of productivity and competition effects in response to liberalization in goods markets have been empirically quantified over the years. Many empirical studies have been performed to scrutinize the effect of market integration on firms’ productivity in emerging markets. The result was that more productive firms self-select into the export markets.

There is a consensus on the view that the global economy is becoming increasingly integrated, and markets from all parts of the world are entering a stage where the traditional economics and ideas are no longer adapted. There are several characteristics that define global economic integration, including an increasingly intensification of trade and investment, broadly comparable inflation rates, deeper financial and economic relations, and convergence of living standards. All of these factors create new demands, and the failure to meet these expectations may result in disappointment, substantial job losses, and decrements in per capita income growth. This implies that market participants have to constantly adapt in order to avoid setbacks.

5. Challenges and Opportunities in International Economics

Despite partially public nature, education is funded privately, and there’s no reason to believe that society’s optimal return on education fully coincides with present students’ willingness to pay. Many countries and universities have thus subsidized education in economics, but these interventions are also a challenge in international economics today. Many low-income families motivate their children to study “practical subjects” so that their kids will be able to help immediately, and hectoring individuals to explore international economics to improve world economies, provide a global public good, or foster strengthened global relationships is probably not effective. Some skilled actors might actually act contra vibes, considered socially constructive, and illegally extract rents internationally until certain markets toppled locally or large event, such as war or climate change. Domestic sustainability becomes the binding intertemporal constraint in investment in human capital. Given changes in global trade, the world could use many more individuals with a local tradition in international economics who can treat foreign peers with respect, tackle a diverse set of topical issues as economists, and be bilingual. Yet educators are still promised to expose their university students the terms of trade, an inherently ambiguous collective noun, and demonstrate that the box diagrams in new trade theory work in a notional five-period version of a “real-world” economy, a conceptually sterile construction.

The most important challenge undercutting the international economy is relevance. The scope and magnitude of international policy concerns are unprecedented, but they more readily evade resolution at the international level, and even intellectually accessible problems aren’t always routed to individuals trained to address them. The most important technological complements are human beings, but soon human capital budgets could be constrained. Most students probably respond primarily to financial incentives, so even economics students could migrate to the private sector.

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