Previously, you examined a variety of products and their origins. Chances are good that one or more of those items were made in another country, or came from another culture. The world is truly interconnected in ways that it was not before.

Recent economic problems have highlighted just how strong these links are. Problems within one country brought down businesses in others. In the modern economy, no country is isolated from the rest, nor could it survive without the others. The same concept applies to the U.S. While you may hear news stories about trade imbalances with China, for example, no one suggests that we stop trading with them. Let's look at the different ways that all of the world's economies are joined.

Imports and Exports

What does it mean when we say products are imported and exported? Is this a good thing? This presentation looks at how international trade works to benefit countries and consumers around the world. It also explains why you might find a lot of items stamped "Made in China" at your favorite discount store.

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Exchange Rates

Have you ever visited another country and tried to use your U.S. dollars? That might work in places close to the border of Mexico or Canada, but it won't work in a lot of other places around the world. How much are your dollars worth in other currencies? This is an important question if you're planning on going to Cancun for spring break! In this presentation, you will learn about how exchange rates are set.

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Trade Barriers and Agreements

Not all countries have free trade. Some countries, including the U.S., may put up obstacles to imports for various reasons, whether political or economic. Many countries have trade agreements with other countries to try and prevent these types of barriers from being erected. Learn more about international trade in this presentation.

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So trade barriers benefit certain manufacturers and workers, but why do political leaders often support them? Businesses and trade groups that reside in a politician's district are potentially important supporters or opponents. Politicians may vote for trade barriers in order to get the backing of these groups, including campaign donations.

The costs of these policies are spread over a large group of people who may not be aware of the higher costs that often result from these barriers. When imports are restricted by public policies, consumers pay higher prices, and job opportunities and profits in importing firms decrease.

Globalization

All of these topics point to the same thing: the world is becoming more interconnected every day. In this presentation, we'll look at what globalization means and how it affects you , as well as examining some of the factors that have helped it spread. Whatever our feelings about how globalization has changed our lives and our way of life, it's a given that the world will continue to become more integrated economically.

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As economies become more interconnected and companies become more global, more work is being done in multiple countries. Transportation and communications costs tend to go down over time and many companies take advantage of cheaper costs for natural or human resources in other countries. This usually involves:

As we've discussed, these activities can have negative consequences for workers in the U.S. labor market since they may be replaced by foreign workers, or companies won't hire additional workers thereby potentially driving up the unemployment rate. Consumers tend to benefit from these trends because they bring down the price of goods.