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Chapter 16 (Misery Index (is an economic indicator, created by economist…
Chapter 16
Misery Index
is an economic indicator, created by economist Arthur Okun. The index helps determine how the average citizen is doing economically and it is calculated by adding the seasonally adjusted unemployment rate to the annual inflation rate.
This is what Misery Index scores look like
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NAFTA
From 1993 to 2007, trade among the NAFTA nations more than tripled, from $297 billion to $930 billion.
The North American Free Trade Agreement, or NAFTA, is a three-country accord negotiated by the governments of Canada, Mexico, and the United States that entered into force in January 1994.
These are the countires that are in NAFTA
European Union
The European Union is a political and economic union of 28 member states that are located primarily in Europe. It has an area of 4,475,757 km², and an estimated population of over 510 million.
The European Flag
Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany are the first countries committed to the European Union
Comparative Advantage
the ability of an individual or group to carry out a particular economic activity (such as making a specific product) more efficiently than another activity.
Example of Comparative Advantages
Taking this example, if countries A and B allocate resources evenly to both goods combined output is: Cars = 15 + 15 = 30; Trucks = 12 + 3 = 15, therefore world output is 45 m units. It is being able to produce goods by using fewer resources, at a lower opportunity cost, that gives countries a comparative advantage.
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