Running Head: INTERNATIONAL TRADE CONCEPTS SIMULATION
International Trade Concepts Simulation
To: Michael Jacobs, President of Rodamia
From: Perron Bryant, Peeyush Jain, Juan Juarez, Sercy Hollis
Subject: International Trade Concepts
Date: May 21, 2007
Rodamia is a large country with tremendous potential. It is surrounded by three countries with different industries. Suntize is a country with a well defined industrial infrastructure. Alfazia has strong productions in agriculture, and Uthania has an established agricultural and industrial economy. All are potential trade partners. This Memorandum explains the factors of economic growth for Rodamia, the production possibilities frontiers, trade agreement and policies, and recommendation for the president of Rodamia to consider in his plan to form trade partners with its surrounding neighbors
Factors of Economic Growth
The country of Rodamia is searching for ways to increase its trading market with the neighboring countries. There are many factors which increase economic growth and can change with each individual’s country. The first is the ability to have adequate financial market regulation. This is necessary to reduce cost, save time, and improve economic efficiencies. The concept of opportunity cost, production possibility frontiers graph displayed the production efficiencies of the potential trading countries. Countries should specialize in the production and exportation of goods and services which at lower opportunity costs. The opportunity cost variables are essential to finding the comparative advantage. This allows the export and import trades to maximize the value of economic growth as well as cost savings to the consumer (Martin, Sotos, Picazo, 2007).
The second is the need for adequate financial economics agent education. The ability to have access to useful investment information can avoid riskier activities and become more efficient in their behavior in...