AP Economics – 4/24/19

  I.  Bellwork:  

Grapefruit  Olives
Country X 10/tons 40/tons
Country Y 15/tons 30/tons

 Q&A Explain your answer and show/compare both mathematical relationships

  1. Which country has the absolute advantage in producing grapefruit?
  2. Which country has the absolute advantage in producing olives?
  3. Which country has the comparative advantage in producing grapefruit?
  4. Which country has the comparative advantage in producing olives?

II.  Objectives:

  • Explain the meaning of the balance of payments accounts
  • Identify the determinants of international capital flows

III.  Capital Flows and the Balance of Payments Pages 406-415

A. Modeling the Financial Account

  1. Underlying Determinants of International Capital Flows
  2. Two-way Capital Flows

IV.  Classwork


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