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Imports, Exports, and Exchange Rates: Crash Course Economics #15

12606 ratings | 1080128 views
What is a trade deficit? Well, it all has to do with imports and exports and, well, trade. This week Jacob and Adriene walk you through the basics of imports, exports, and exchange. So, you remember the specialization and trade thing, right? So, that leads to imports and exports. Economically, in the aggregate, this is usually a good thing. Globalization and free trade do tend to increase overall wealth. But not everybody wins. Crash Course is on Patreon! You can support us directly by signing up at http://www.patreon.com/crashcourse Thanks to the following Patrons for their generous monthly contributions that help keep Crash Course free for everyone forever: Mark, Eric Kitchen, Jessica Wode, Jeffrey Thompson, Steve Marshall, Moritz Schmidt, Robert Kunz, Tim Curwick, Jason A Saslow, SR Foxley, Elliot Beter, Jacob Ash, Christian, Jan Schmid, Jirat, Christy Huddleston, Daniel Baulig, Chris Peters, Anna-Ester Volozh, Ian Dundore, Caleb Weeks -- Want to find Crash Course elsewhere on the internet? Facebook - http://www.facebook.com/YouTubeCrashCourse Twitter - http://www.twitter.com/TheCrashCourse Tumblr - http://thecrashcourse.tumblr.com Support Crash Course on Patreon: http://patreon.com/crashcourse CC Kids: http://www.youtube.com/crashcoursekids
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Text Comments (1022)
Ilham Kusuma (2 days ago)
so why US dollar always appreciated when they always deficit? ahhh CCP always buy bond of USA.
crowbird213 (4 days ago)
Our trade deficit is caused by exporters to the US buying Us treasuries instead of converting their US dollars into their home currency. Thus the US dollar is propped up to levels that won't allow trade balance. The solution isn't protectionism but eliminating debt, so their isn't a US treasury bond available.
NFN99 (18 days ago)
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Uncle Putin (23 days ago)
This video is not very good. you start out spending a lot of time on simplistic Mickey mouse stuff and then when you get to the current account in the financial account you whizzed through at a hundred miles an hour and nobody can understand anything.
Uncle Putin (23 days ago)
How do you spend that extra $200 that you save by buying the TV made in Malaysia? you spend it on rehab for your opiate addicted son who has no job because the jobs were all shipped over to Malaysia.
Archana Verma (23 days ago)
hello u both are best .. can I get ur videos in Hindi language
Evan O'Neil (1 month ago)
i see this and why does he have acdc belt
One Above All (1 month ago)
"Best wishes, John Green"
Laskuna (1 month ago)
Greate vid.
M .G (1 month ago)
I really appreciate your way of facilitating those kinda solid definitions and make it simplistic for us
Christian Czarnowsky (1 month ago)
"intellectual goods" and "Kanye West Albums" shouldn't be in the same sentence
Richard Wagner (1 month ago)
1:49 Irony is speaking about economics while having a Karl Marx piggy bank on your book case.
Very typical pro trade argument - I'm sure these people were paid to do it like the others. Virtually every protectionism explanation you find is pro "free" trade. Amazing what a couple of million dollars can do to control a conversation. The WTO is an organization designed to cement the elites power and treat you workers in every nation the same. The same as the lowest bidder on labor that is.
Leslie Brown (1 month ago)
Deficits mean your becoming poor. 728 billion worth of poor. Cant spin it any other way.
Nyssa Syratov (1 month ago)
yuan is pronounced wrongly
daniyal k (1 month ago)
it's funny watching this today in 25 may 2015 amid the trade war of U.S on china
Rudolph Stoltz (1 month ago)
It is not 100% accurate. Depends on the party that you support.
Pete Eddy (2 months ago)
It feels like the US is becoming more of a “service” economy and That just seems like a bad idea. We can’t have a country that is primary employed by the Chipotles of the world.
David Trujillo (2 months ago)
Are you guys issuing an amendment to this video, now that Trump made China stop stealing intellectual, and artificially lowering their currency value and the economy has skyrocketed so much not only the market is doing well, but more importantly the GDP has gone over 3.2%
Azar K. (2 months ago)
"It doesn't make sense to make everything on your own" Trump takes the mic...: "CHI-NA"
Jayden Pearson (2 months ago)
Why do you waste your life talking about stuff that wont matter in 10 years we all wont be here because of global warming.
Jayden Pearson (2 months ago)
Why do you waste your life talking about stuff that wont matter in 10 years we all wont be here because of global warming.
Jayden Pearson (2 months ago)
Why do you waste your life talking about stuff that wont matter in 10 years we all wont be here because of global warming.
Jayden Pearson (2 months ago)
Why do you waste your life talking about stuff that wont matter in 10 years we all wont be here because of global warming.
Jayden Pearson (2 months ago)
Why do you waste your life talking about stuff that wont matter in 10 years we all wont be here because of global warming.
Jayden Pearson (2 months ago)
Why do you waste your life talking about stuff that wont matter in 10 years we all wont be here because of global warming.
Jayden Pearson (2 months ago)
Why do you waste your life talking about stuff that wont matter in 10 years we all wont be here because of global warming.
Jayden Pearson (2 months ago)
Why do you waste your life talking about stuff that wont matter in 10 years we all wont be here because of global warming.
Jayden Pearson (2 months ago)
Why do you waste your life talking about stuff that wont matter in 10 years we all wont be here because of global warming.
Jayden Pearson (2 months ago)
Why do you waste your life talking about stuff that wont matter in 10 years we all wont be here because of global warming.
Ike Okereke (2 months ago)
Покажy будто бить100 бakсов ежeднeвно. Все дeтaли на кaнaлe.
Azen Contento (1 month ago)
Please translate.
vietsub (3 months ago)
should we restrict import?
Lil Roizman (3 months ago)
liberal and superficial you shouldnt go reproducing ideologic things like ricardo given as truth just like that
@ 8:32 He just does not even cover the fact that the Chinese have a third option... They BUY OIL.... Because OIL is traded in U.S dollar.... There is part of the problem, because when they get our cash, they can use it to buy product from a different nation.... This is why we have such a deficit. In theory not a bad thing, but once oil is no longer traded for in U.S dollars we might be in trouble...... Because as the deficit proves, China is more interested in using U.S dollars for buying products in other places. Rather than buying American products or Investing in American companies.
Aaron E (4 months ago)
Can we force dmfp to watch this? Just tell him it's about him.... he'll watch it!
Liam Li (4 months ago)
How did they found these two to present, it is just fantastic.
John Trammell (4 months ago)
Anybody have a set of questions that can be used with this video????
Cosmic Mariner (4 months ago)
Lesson from this Video, "Global FREE TRADE may put you out of work and turn your small community into a ghost town, where skilled jobs include, "Welcome to Walmart!", or "Would you like fries with that?" or "Do you need a date Mr?" but think of the rising wages in the 3rd world, and the exploding profits of corporations who will sell them the products you can no longer afford. WHEN LIBERAL RACE MONGERS GET BUSINESS DEGREES AND RUN THE WORLDS CORPORATIONS. They love fine things, but you should learn to have less.
Micah Wright (4 months ago)
Kind of confusing near the end, but at the same time, I'm half asleep right now.
Jigar Chills (4 months ago)
Take your time in your delivery... is too speedy
Jeff Lokanata (5 months ago)
Hey, Crash Course export this video to my country. So a trade deficit for my country.
Андрей А (5 months ago)
Long story short, USA buy goods for free on 700 bln dollars every year, frocing China and other countries to buy US treasuries. which worth nothing and they will never return their money back.
Lassiter Bonano (5 months ago)
NAFTA stunk for America. Do your research first
ray1983able (5 months ago)
Net Exports , Trade Surplus & Defecite , Re -Shuffling Jobs , Protectionism , Exchange Rate , Dollar appreciate & Depreciate , Balance Of Payments .
cool raizers (5 months ago)
Okay fine if the tv costs 200 dollars less but what about the logistics and shipment cost. Wouldnt that cost will make it equal to American rate. Plz answer my question
tay's got crown (5 months ago)
Why do America even export Thane west albums they ,are waste
Ryan Borganson (5 months ago)
Woah... yeah. That deal with china is not gonna... uh.... yeah no let's not do that. Trumps definitely right lol.
Ryan Doyle (5 months ago)
The most amazing thing about this video is the Karl Marx bust on the desk in background.
GLEN 7k (5 months ago)
PlaneetRuk (6 months ago)
When someone from the USA says he is an American is like a German saying he is an Europe/African
Jacqueline (6 months ago)
"Intellectual goods, like Kanye West albums" That's debatable...
Titus Wang (6 months ago)
He didn't say, "Thanks, Thought Bubble!"
Tomas (6 months ago)
4:52 Donald Trump be like: "Hold my beer" :D
whousay Iam (6 months ago)
Why Want The US Ratify The International Covenant on Economic, Social and Cultural Rights (ICESCR) ??
whousay Iam (6 months ago)
Its a shame In the Year 2019, I am a 33 year old truck driver that cant afford any good and services. Today's my sons 6th Birthday and he has lived his hole life in Low income Apartments as the only white kid. I don't even have a car, can't afford one.. What good is paying Social Security and income taxes if one excluded from the services the tax supports??
AWESOMEMAN MANN (6 months ago)
Correction: when US buys an American made television vs an imported foreign made television yes you save $200 on the imported but a US worker will not have a salary of $3000 to spend it in the economy therefore you’re hurting the economy not helping
divyanthj (6 months ago)
4:50 ha ha ha. Some regular guy from 3 years into the future is laughing...
Bonde Barca (6 months ago)
Could you explain whether or not there is a disadvantage for countries whose currency is not a reserve currency therefore have to have foreign exchange reserves and how trade deficits impact them moreover if they have foret denominated debt
Alexander Bourne (6 months ago)
I wish i could support this by paying money...
Horton El Troll (6 months ago)
NAFTA was a nightmare. It costed the US over 40 million manufacturing jobs. Maybe quit taking advice from left leaning economists? And those graphics are imported? You do know that doens't increase our GDP? Thanks for outsourcing.
Horton El Troll (6 months ago)
Economists would say we NAFTA what? omg this is a joke.
AnaisMartane (6 months ago)
China just needs to dump american treasuries and spend the 2 trillion on thousands of SSBNs. america will return to a trade balance hopefully and China can finally use the decades worth of trade surplus towards self betterment of the Chinese nation.
Giorgi Maisuradze (7 months ago)
Nice... Thanks!
Oudom Chan (7 months ago)
I love you channel so much..
B. Lipkowitz (7 months ago)
Tariffs cost each citizen of US more$$$$for everything we get. The business owners do make more$$$$, but the more $$$$comes from the consumer. Wake up!
Jill Elkins (7 months ago)
Trying to study for economics but every time i watch this, I almost fall asleep... ugh
Cheezit_ Gaming (7 months ago)
Why does he look like Reggie from Nintendo?
Joshua Rice (7 months ago)
This ain’t John green
Charles Yeo (7 months ago)
Basically, trade deficit is not the devil in it self. It is how the trade deficit is created that is the problem. Manufacturing jobs in the US has decreased over the years is simply because the products it manufactures is not competitive in the market. Using protectionism to protect the competitiveness of the product in the effort to keep the jobs only delays the inevitable. Eventually the whole house of cards would come crashing down and everyone would lose their jobs. A business can not keep running a loss and the government can't keep protecting it if it intends to be agile and competitive. The problem is that as the sector of economy moved away from manufacturing, the jobs that are left behind to compensate is not tailored to traditional manufacturing trained human capital. Factory workers and miners don't want to lose their jobs and find out that now they have to go to college to get a degree in computer science. Or become a male nurse. Or become a waiter. They can't or don't want to move to the big cities and start new life there. not only do they have to battle with retraining in different skill set, they have to battle with younger workforce for jobs and they have to deal with the social stigma of not adhering to gender role accepted jobs. trade deficit is not the problem in itself. the problem happens when people are left behind as the economic environment changes, and is too slow to keep up with it.
Aidan . Z (7 months ago)
ugh whys she so fast
Evan Erickson (7 months ago)
Comparative advantages only work in a vacuum where each country is exporting and importing the same number. A trade deficit is bad because it means we are importing more "value" then we export and thus capital is leaving the USA and going abroad. We need to have a 0 trade deficit to fully harness comparative advantage. Without a 0 trade deficit, we are prone to outsourcing which is where there is an absolute advantage, not a comparative advantage.
Caleb Frezza (7 months ago)
the guy looks like mark cuban
Suzy the Cockatoo (7 months ago)
Did he really say "gooder"?
Shabbir Ahmad (7 months ago)
increase in oil price increase in inflation
AllAtousa (7 months ago)
this was a fantastic video.
hari sankar (7 months ago)
Export of ..cashewnet..palam oil...etc from South Africa to other Countries for more details contact on whatsapp +233241245521
Juanita Sullivan (8 months ago)
Talking way too fast. Couldn't make it past 1:44
Juanita Sullivan (8 months ago)
@Rybina You might want to read my comment again and not read into what I said.
Rybina (8 months ago)
slow down the video lmao
Joshua Barnhart (8 months ago)
Thanks for making this video. I'm taking an upper-level Macroecon course and this has helped make it less abstract. Keep it up!
Wallace Callow (8 months ago)
Tariffs aren't about ending trade. Just regulating imported products, materials, and parts. Some imports we may need, but others would be just competing with companies at home too much, once our factories were up and running. I say to the President- if you enact tariffs on those unneeded imports, just make sure that you have factories up and running, making those products, materials, and parts before you raise tariffs on them, since we'll need those imports in the meantime. Except for imports like steel, etc., since we still have some producers, here, that haven't located to overseas production for cheap labor. They're the ones getting screwed by the trade deals. Then, later, we can produce those things here, again, with less foreign competition. As long as future presidents go along with it. I know it would be a risk for businesses to build new factories, unless they can get some assurance that we wouldn't change back to free trade, again. But we need to lower the trade deficit, and this is one way. By limiting imports. We have materials and technology to do it here. And it shouldn't raise prices too much on domestic goods, compared to imports, because there really isn't much difference in prices between the two, now. For one thing, you have to pay much more to ship goods across the world. And many good paying manufacturing jobs would open up again, lowering unemployment. Imagine all the jobs created to produce replacements for all those imports! Either we get to a one-world without borders, or else have regulated trade. Don't combine the two, ('free' trade). Countries who have trade surpluses ought to use their factories for their own internal economies.
Wallace Callow (8 months ago)
How about one world socialism without borders? All businesses paying net incomes to the global collectives' local chapters. Everyone a part owner. One global security force replacing all military. Granted, you'd need to somehow prevent mass migration from third world to first world, mainly because of PRESENT infrastructures. And come to prior agreements between nations and cultures to compromise on one general culture, and ethics, and laws, before bringing down the borders, (good luck!). But once all the worlds' resources were available to share, it wouldn't take too long to upgrade the infrastructures in the poorer regions. And anyone in those regions could conceivably get a job, due to the collective's non-profit m.o. Allow businesses to have some competition- yet still part of the collective- by diversity of prices and products, to encourage innovation and sales.
Ali Khan (9 months ago)
I liked the video. Especially the part where she’s throwing clothes on his face. ..lol jokes apart very informative.
Mehboob ur Rehman (9 months ago)
still doesn't answer the one basic question I had, who decides what the exchange rate is going to be? Demand and supply is all fine but it's not like if I go to exchange dollars for pounds the guy at the counter will go into a deep thought estimating demand for dollars and come up with number there and then. So who decides and dictates that I dollar equals 0.88 pounds?
Caveman (9 months ago)
I have a question: When China and Russia trade in their own currencies what is the exchange rate based on?
yassin farid (9 months ago)
Tracey Sutton (9 months ago)
economists are assholes. oh, more importantly, econ101 isn't science.
Janjan Abc (9 months ago)
they dont need to talk fast if they are explaining something
john case (9 months ago)
ACDC belt....SWAG
W K S (10 months ago)
Thanks for this video. Really clear and easy to follow explanation :)
Rob Brenton (10 months ago)
The Flying Spaghetti Monster is LORD !!!!
Aaron E (4 months ago)
All hail the spaghetti monster!
James Mac777 (10 months ago)
Free trade is an illusion, because it is Government that determines the law, and we are crossing borders that allow Americans to be taken advantage of. We do have to protect ourselves instead of running child-like that illusions like NAFTA benefits Americans, when it causes industry to leave America and then we start supporting the foreign nations who seek that advantage as foreign governments and foreign law: It is not our American job to pay for the world. Part of the problem is the number of governments that nationalize or is a direct business partner in business practices, and this is not just about the self-interested nature of businessmen, where it is the self-interested nature of governments and their agents that are different socialists and kingdom driven beasts (a horse of a different color). The best we can expect is reciprocal trade agreements, but we cannot just turn off the borders, because that means lawlessness and being taken advantage of (borders literally means law, because it is a claim of where the law is). Fences make the best neighbors, and that is what law does, so that we are not lost to the barbarian hoards, pirates, bandits, and thieves that rule the world. We do see people claiming the total freedom of the motto, "don't fence me in," but this total freedom is an illusion, because it takes Government to secure freedom, because we never stop reporting to someone. We do not see our world-wide bill of rights, and instead see kingdom building and materialism with the powers that are claiming total freedom for themselves as ruling lords, and we also see the chilling effect on the law that criminalize the everyman into absolute obedience and silence into the fear of being special and capable that makes everyman noticed and targeted.
James Mac777 (10 months ago)
The United States of America once had the largest textiles industry, and now we import clothing. It has to do with slave labor, with nations like China willing to push people into substandard living conditions to meet their market demands, because on the industrial scale America should be able to serve themselves better.
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