The Open Economy Why do countries trade with each other? \No nation was ever ruined by trade.\ -- Benjamin Franklin More varieties; higher quality; cheaper price
◼ 1.To learn the most commonly used instruments of payment– bill of exchange, promissory note and cheques. ◼ 2.To learn the methods of payment in international trade– remittance, collection, letter of credit and bank guarantee
Contents The Edgeworth (艾奇沃斯) Box Pareto improving trade Pareto Efficient Allocation The Core (核心) Trade in a competitive market Walras’ Law of general equilibrium (一般均衡)
Interdependence and Trade Consider your typical day: – You wake up to a alarm clock made in Wenzhou – You put on some clothes made of cotton grown in Xinjiang and sewn in factories in Fujian Province