The United States' Strategy for Hemispheric Free Trade
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Authors
Goldberg, Rachel A.
Issue Date
1991
Type
Thesis
Language
en_US
Keywords
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Abstract
Nations trade to obtain the rewards of specialization and advancement. Every
country is not suited to produce all the goods it demands because each country does
not possess the same resources. All nations benefit if they produce their area of
expertise and obtain other desired goods through exchange. Exporting nations benefit
through the resultant increased demand of their goods thus raising production and
increasing the level of employment in the country. Nations that import benefit from an
enhanced variety of goods offered, causing an increase in competition which spurs new
innovation. lower prices. and p~oduct improvement.
When a nation increases its level of imports. prices fall; therefore. consumers
have more money available and may refrain from spending all of their income. saving
instead. When savings rise resources are freed for investment goods. boosting
economic growth and future output.
Developing nations. unable to produce capital equipment. must concern
themselves with not only transferring resources to more efficient production. as trade
develops, but also with how to convert resources into investment goods. (8. p. 268)
Because developing countries do not have investment goods they must obtain capital
equipment through exchange making trade essential for undeveloped nations' growth.
Trade provides developing nations with technological advances that would take them
decades to efficiently manufacture. As the economy continues to grow. incomes will
rise. causing savings and investments to rise, stimulating even more growth.
Description
v, 90 p.
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License
U.S. copyright laws protect this material. Commercial use or distribution of this material is not permitted without prior written permission of the copyright holder.