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Essential Purpose

No nation can be totally self-sufficient. A need exists for trade among nations for the goods and services as well as the resources needed to survive and grow in the global economy. Sometimes, trade is restricted and free trade can be controversial. People and nations would not voluntarily trade with another nation unless they both gained from this exchange. As a result of this decision to trade, more goods and services can be produced efficiently and resources can be used more effectively.

This module will provide students with the opportunity to analyze the costs and benefits of global trade. They will examine the workings of global trade as well as the consequences and benefits from pursuing trading with other countries. They will examine how countries work either to promote or limit trade amongst each other.

Finally, students will analyze a situation in the United States where we might want to encourage trade barriers to restrict international trade. They will decide if these barriers are warranted in this specific situation.

National Economics Standards

Standard 6

Students will understand that when individual, regions, and nations specialize in what they can produce at the lowest cost and then trade with others, both production and consumption increase.

Standard 7

Students will understand that markets exist when buyers and sellers interact. This interaction determines market prices and thereby allocates scarce goods and services.

State/Local Standards

States should align these modules to their own standards as appropriate.

Essential Questions

Essential Content

Reasons for the Development of International Trade International Trade is Voluntary and Creates Wealth Barriers and Friction Limiting Free Trade

Essential Skills

Compare and Contrast


Summative Assessment

This summative assessment and scoring guide should be reviewed with students prior to using the activities in the module. Students should do the assessment after the activities have been completed.

Essential Questions Addressed by the Summative Assessment:

  1. How does international trade influence the lives of American citizens within an increasingly global economy?
  2. Why is international trade important to a nation's economy?
  3. What factors sometimes lead nations to restrict and limit free international trade?

Printable Student View

Connection to Prior Knowledge
Product/ Performance
Criteria for an Exemplary Response
Now that you have learned that countries sometimes use and encourage trade barriers to restrict international trade, you are ready to decide if these barriers are warranted in a specific situation.

Chinese import of Ipods and MP3 players are selling better then domestic versions in the United States market. Companies producing these products in the United States are complaining to Congress that something needs to be done to remedy the situation or they may go out of business. They would like Congress to take action to protect American made products.

You serve on the President's Trade Council and have been asked by the president to meet with these companies to get more information on the problem. You also understand that there are both positive and negative consequences involved in a decision to implement trade barriers.

Do some additional research on the Web to assess the negative consequences of trying to help these companies survive. Be prepared to present these consequences to the company representative when you meet with them. As you prepare for the meeting, be sure to:

  • Make a list of the consequences to a country of initiating trade barriers
  • Develop supporting reasons for each consequence for use in your presentation to the company representatives
  • Your own personal decision about whether trade barriers should be imposed on China
  • Supporting reasons for your decision

Scoring Guide