Mercantilism

Though the early English settlement of Plymouth provides several points that reflect America today, Jamestown presents a better representation of modern America than Plymouth in Massachusetts. To elaborate, the English settlement’s purpose in colonizing Jamestown was their economic motives to obtain a widespread English market for English manufactured goods. America today has become financially wealthy, yet companies persist on gaining a wider market with refining their products/services to…

The Most Favored Nation clause refers to a level of status given to a country by another and is enforced by the World Trade Organization. When a nation grants this clause to its trading partner, it means that the state seeks to increase trade with the other country. Through Most Favored Nation countries can offer each other specific trading advantages such as reduced tariffs, fewer trade barriers, and better import quotas (Acconci, 2005). These are also the factors that countries consider when…

The Economics of American Naval Dominance Part I To say that the U.S. Navy doesn’t influence the job market would be an understatement. Production of ships, planes, and other military equipment helps create domestic jobs and strengthens the U.S. Navy’s global presence. “Maintaining a strong industrial base supporting the seagoing elements of the U.S. Merchant Marine and U.S. Navy includes having the trained and experienced manpower necessary to crew the vessels comprising the commercial merchant…

Free-Trade and Protectionisms Free-Trade is the most important part of the economic systems in the world, but it may also cause downfalls in the economy resulting in many job losses, as experienced in the United States. “Protectionism is the trade protection that is the deliberate attempt to limit imports or promote exports by putting up barriers to trade (Milner).” Economist have looked to different protections to counter the negative impacts that are the results from globalization and…

“The Trade-off Economy - A New Cheerful Side to the Dismal Science” by Lawrence Summers delves into the economic concept of trade-offs. Summers explains how society is jammed and bombarded with economic trade-offs. “Guns vs. butter, public vs. private, efficiency vs. equity, environmental protection vs. economic growth, consumption vs. investment, inflation vs. unemployment, [and] quality vs. quantity…” (Summers) are a few of the trade-offs Summers challenges. He explains how not every decision…

The Hecksher-Ohlin theory famously states about international trade, that in a two-nation, two-commodity model, considering that one of the nations and one of the commodities is labour intensive, and the other nation and the other commodity is capital intensive, (labour and capital being the only factors of production) that the capital intensive nation produces and exports the capital intensive good, while the labour intensive nation produces and exports the labour intensive good. In 1954,…

According to the doctrine of Adam Smith, free trade is to best policy between two nations in the case of that trade between two countries is based on an absolute advantage. When one country is more efficient in producing one commodity but is less efficient in producing another commodity than other country, the gains from trade will be achieved for both countries through specializing in in the production of the commodity which has an absolute advantage, and exchange with other country for the…

As volumes of trade increased, a newer theory was offered in the 18th century by Adam Smith, who introduced the concept of absolute advantage. Smith was the first to point out that unrestricted trade and free international competition benefit a nation more than the Mercantilist thinking (Schumacher, 2012): according to Smith, specialisation and concentration of workers on a single task in a factory would lead to greater skill and overall higher productivity than what would be achieved if these…

The purpose of the international trade game, performed in class, was to teach that trade is essential for many countries to survive. In certain countries, one resource may be scarce while another is of abundance. In order to balance out this dispersion of resources trade occurs between countries. This process even takes place within the countries, transactions between consumers and producers face trade offs of their supplies. Without it, each side will eventually collapse. In the international…

Smith analyzeDiscussion Essay 2: Adam Smith During his time as a moral philosopher Adam Smith coined the phrase “mercantile system”. He used the term to describe the new economic system based on the merchant trade using gold and silver. Trudy Mercadal describes mercantile as a “term to refer to an economic policy designed to enrich a nation by increasing exports and decreasing imports...” which “...sought to create a beneficial balance of trade with two purposes: attracting commodities like…