The price drops when there is a surplus of product, sometimes to the point where companies are selling product at a loss because the holder has to pay for storage. International trade effects the GDP, domestic markets, and university students by:
* Increasing GDP
* Domestic markets will increase because of more goods and services with lower terms of trade.
* Students are not in labor force. But they will have more goods and service to consume, and the parents pay. However, they have a chance to learn about international trade in school in practice.
The prices of imported goods are increases. The role tariffs play in international trade has declined in modern times. One of the primary reasons for the decline is the introduction of international organizations designed to improve free trade, such as the World Trade Organization (WTO). Such organizations make it more difficult for a country to levy tariffs and taxes on imported goods, and can reduce the likelihood of retaliatory taxes. Because of this, countries have shifted to non-tariff barriers, such as quotas and export restraints. Organizations like the WTO attempt to reduce production and consumption distortions created by tariffs. These distortions are the result of domestic producers making goods due to inflated prices, and consumers purchasing fewer goods because prices have increased. The foreign exchange market and exchange rates, to understand how monetary policy affects the value of the dollar not only domestically, but affects the value of the dollar in foreign exchange markets as well. By affecting the value of the dollar in the foreign exchange market, monetary policy affects the economy by affecting the relative price of domestic and foreign goods, affecting the export and import sectors, as well as the financial markets. Exports and imports are each more than $1T/year, or more than 10% (each) of GDP ($10T). Many U.S. companies have more than 50% of sales overseas: Coca-Cola, GM,...