Everyday countries trade their goods because they have the comparative advantage in making that particular good. In this lesson, you will read through an interactive story problem to learn about trade and specialization and the outcomes they have on the world.
International trade allows countries to buy and sell both domestic and foreign goods, as well as services and financial assets. A country's transactions are summarized in a set of accounts called the "Balance of Payments (BOP)." Students will learn how to record transactions in the BOP accounts, and why the sum of the current account and capital account must equal zero.
In this lesson, students will learn about the gains from trade. Students will participate in a trading game that will demonstrate that trade can make everyone better off.
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