Review of Chapter VI and the Grade 9 course

Chapter VI is about the economy’s links with the world. Countries trade because of differences in resources and costs: absolute advantage relates to using fewer resources, comparative advantage to a lower opportunity cost. Foreign trade volume is the sum of exports and imports, the balance is their difference. A state can protect the domestic market with tariffs, quotas and licences (protectionism), but there is a risk of counter-measures and rising prices; trade is regulated by agreement, first by GATT, then by the WTO. The exchange rate is the price of one money unit in another and forms from demand and supply; if exports grow, demand for the national currency rises. Global problems of the world economy are peace, the environment, resources and energy, poverty and hunger; they must be solved together. The 2008 crisis began in the US mortgage system and spread worldwide, showing that countries’ economies are linked. When reviewing, link each concept with an example and do calculations step by step.