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Individuals Are Knowledgeable About Macroeconomics. It Is Essay

¶ … individuals are knowledgeable about macroeconomics. It is a huge and potentially difficult subject to understand, and yet its constructs intimately affect each and every aspect of our lives. To show that this is so, I plan to explain some of the factors of the current state of the U.S. macro economy so that we can gain a better understanding of their implications. I will address this topic by posing four of the most popular questions and answering them by connecting them to our situation. What happens when there is a surplus of imports brought into the U.S. Cite a specific example of a product with an import surplus, and the impact that has on the U.S. businesses and consumers involved.

When imports are greater than exports, the United States is said to have a balance of trade deficit. An example may be of the surplus of Sony electronics that are flooding the U.S. market from Japan. For any country to economically function well, the balance of the trade of that nation must be equitably balanced on both sides with trade surplus (i.e. A balance of national exports) equaling that of trade deficits (i.e. Surfeit of import). If import exceeds that of export, the country may find itself in grave economic danger since it can affect the output and income in the economy; the level of employment and unemployment in the economy; and the price level and the inflation rate in the economy. The output and income in the economy refers to the increased demand of national production that is stimulated by demand for exports (rather than imports). This leads to the country becoming wealthier. A surplus of imports, however, results, in decreased production. Unemployment rises since less people are involved in producing exports and since more citizens are accepting foreign-made rather than domestically-produced products. Finally, preference...

Whilst surplus of imports may be good for individual consumers who may end up paying the lower prices of these imparts and who have a section, it may be detrimental for the country in general (Froyen, 1998; Gordon, 1998)
Question 2: What are the effects of international trade to GDP, domestic markets and university students?

International trade is essentially the back and forth flows of business between one and more countries. If the country succeeds in boosting its exports, it stands a good chance of becoming wealthier, thereby increasing its GDP. America, therefore, under its Obama administration has recently placed a great deal of onus on innovation in order to overcome the setbacks of the recession where the national debt was highly increased, imports, during some years, outweighed exports, and its domestic market as a result suffered due to the fact that citizens were consuming more foreign goods than they were of their own. Less domestic goods were, therefore, produced, cost of these domestic goods rose, cost of supplies related to producing these domestic goods rose too, and part of the peripheral problems included more American business outsourcing or using foreign resources. All of this (and more) injured the domestic market.

An analogy may be drawn in terms of education. Firstly, with the national GDP raising the U.S. is enabled to pour more money into its educational coffers. From another point-of-view, export (or exodus) of students to other countries reduces the student body of people who choose to study in American universities thereby raising the cost of tuition. Tuition and fees paid by international students, on the other hand, have the effect…

Sources used in this document:
Scissors, MJ et al. (2012) Trade Freedom: How Imports Support U.S. Jobs

The Heritage Foundation

http://www.heritage.org/research/reports/2012/09/trade-freedom-how-imports-support-us-jobs
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