Individual Paper

Submitted By cal6629
Words: 815
Pages: 4

International Trade and Finance Speech
Christopher Allen Lamerson
ECO/372
May 6, 2013
Blake Bennett

International Trade and Finance Speech
When the country exports product to the United States, and the state received a surplus on imports, it means the country that exported the product has a favorable trade balance, or a surplus. When there is a surplus in products, it signifies a price drop, even if the country is selling at a loss. The reason this happens is due to buyers already paying invoices for product, not to mention taxes and storage fees. Some country's have certain surpluses of product, but require some other resources in order to meet the demand in the marketplace. The dollar is widely the most used currency in the market, so if the value drops, or in short supply the value will rise and price will drop if item is no longer in demand (Shane Hall, 2013).
Foreign market has become important to the U.S. over the years, due to the exports and imports. The growing marketplace benefits the standards of living, and trades are promoting job growth, not to mention America's gross domestic product (GDP). Gross domestic product is the total amount of products, goods, and services provided according to the marketplace (Bob Mcteer, 2008). The categories observed are consumer spending, investments, and government spending. According to Bob Mcteer "exports of goods and services generate income at home, and so they are also a component of GDP imports, on the other hand, this will generate income abroad, so they are subtracted from the other categories of spending to get a more complete picture of how much an economy is actually producing" (2008). Therefore, the economy can provide jobs for students and unemployed workers' if there is a surplus in the marketplace, due to the goods and services being demanded.
The government has a variety of agreements set in place to set trade policies, such as tariff and quotas. Center for Global Development incorporates three trade agreements, bilateral trade agreement is between two nations with many countries adhering to policies in the marketplace. The United States is a part of several trade agreements, such as North American Free Trade Agreement (NAFTA), and recently negotiated with central countries, the Central American Free Trade Agreement (CAFTA) will not take affect yet due to working out negotiations (cgdev, 2013). Multilateral agreement is in place through the World Trade Organization, they organize the less developed countries together giving them a stronger bargaining position. The U.S. will not change these policies because of the sensitivity of the situation with other markets either not in agreeance with policies, or lack of attendance to pass judgment on a policy. If the rich countries were to lift the trade barrier to products from poor countries, it would estimate millions of people lifted from poverty (cgdev, 2013).
According to Nicholas B. Sisson "the foreign exchange markets are the world's most liquid financial markets, with currency exchange rates experiencing volatile fluctuations along both narrow and wide margins" (2013). There is a short-term and long-term exchange rate, with every currency traded at any given time, and with the short-term exchange rate changes the market minute by minute to fluctuate the supply and demand of products and