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

10821 ratings | 937301 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 (1013)
PlaneetRuk (1 day ago)
When someone from the USA says he is an American is like a German saying he is an Europe/African
Jacqueline Schmeizl (5 days ago)
"Intellectual goods, like Kanye West albums" That's debatable...
Titus Wang (14 days ago)
He didn't say, "Thanks, Thought Bubble!"
Tomáš (21 days ago)
4:52 Donald Trump be like: "Hold my beer" :D
whousay Iam (21 days ago)
Why Want The US Ratify The International Covenant on Economic, Social and Cultural Rights (ICESCR) ??
whousay Iam (21 days 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 (22 days 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 (23 days ago)
4:50 ha ha ha. Some regular guy from 3 years into the future is laughing...
Bonde Barca (25 days 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
hamza imam (30 days ago)
I wish i could support this by paying money...
Horton El Troll (30 days 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 (30 days ago)
Economists would say we NAFTA what? omg this is a joke.
AnaisMartane (30 days 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 (1 month ago)
Nice... Thanks!
Oudom Chan (1 month ago)
I love you channel so much..
Hudson Kim (1 month ago)
How did a YouTube channel about...learning!🤢🤮... get so much subs?🤨🔍
B. Lipkowitz (1 month 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 (1 month ago)
Trying to study for economics but every time i watch this, I almost fall asleep... ugh
Cheezit_ Boi (1 month ago)
Why does he look like Reggie from Nintendo?
Joshua Rice (1 month ago)
This ain’t John green
Charles Yeo (1 month 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 (1 month ago)
ugh whys she so fast
Evan Erickson (1 month 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 (1 month ago)
the guy looks like mark cuban
Did he really say "gooder"?
Shabbir Ahmad (1 month ago)
increase in oil price increase in inflation
AllAtousa (1 month ago)
this was a fantastic video.
hari sankar (1 month ago)
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Juanita Sullivan (2 months ago)
Talking way too fast. Couldn't make it past 1:44
Juanita Sullivan (2 months ago)
+Rybina You might want to read my comment again and not read into what I said.
Rybina (2 months ago)
slow down the video lmao
Joshua Barnhart (2 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 (2 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 (2 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 (3 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 (3 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 (3 months ago)
I have a question: When China and Russia trade in their own currencies what is the exchange rate based on?
yassin farid (3 months ago)
Done
Tracey Sutton (3 months ago)
economists are assholes. oh, more importantly, econ101 isn't science.
Janjan Abc (3 months ago)
they dont need to talk fast if they are explaining something
john case (3 months ago)
ACDC belt....SWAG
ErichLancaster (4 months ago)
Thanks for this video. Really clear and easy to follow explanation :)
Rob Brenton (4 months ago)
The Flying Spaghetti Monster is LORD !!!!
James Mac777 (4 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 (4 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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John Rick (4 months ago)
Why dollar sign for peso?
Grace Antonio (4 months ago)
Thanks. You know what? The world economy is a stretch of complicated matter in a complex web where lives of people are caught. Why can't humanity go back to simple ways of living? It reminds me of this: "The world is too much with us, getting & spending we lay waste our energy" (by Henry W. Longfellow) In other words, too much materialism. SIGH
George Busieka (4 months ago)
After watching this video, it appears United States economy is stable because of international trade. United States imports goods from Canada than China yet China is blamed for trade imbalance??? China being an emerging market will continue to pose a great challenge to the world market creating a healthy competitive trade.
abuwarith1 (4 months ago)
Too much too fast
cem vural (4 months ago)
Trump should watch this
Anoop Mehta (5 months ago)
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ian mukunya (5 months ago)
Aha! Now I understand why it said China devalues their currency, its because they want to make it cheaper for other countries to buy their goods.
Mr Magoo (5 months ago)
wasn't it funny when she said mexican tourist
John Smith (5 months ago)
You En (Yuan) Not, You Ahn.
EZRA DAVID (5 months ago)
5:03 isnt that happening right now ?
Micheal Farmer (5 months ago)
4.57 Tariffs (protectionism) history is repeating itself. Insanity is the inability to learn from past mistakes.
Al.Mo. (5 months ago)
yes, it is hard to see the benefit of economic growth, when the top 1% are keeping all of the cake to themselves.
Al.Mo. (5 months ago)
that was the world before trump doomed us
Vanessa Eshou (5 months ago)
Loved this video !!
Charles Belcher (5 months ago)
I would have to give this vlog a failing grade. The fast talk defeats the clarity of what is being said and why. If the vlog broke down the vlog into several vlogs it may help some. to dismiss our trade imbalance with china may not be doing justice to the issue. To preserve the USA economy something has to change in international trade. goods and services have to be made and provided by the USA and not simply purchased by Walmart in China. How do we do that. Tariffs may be one answer.
sray118 (5 months ago)
Bring this video back in mid-2018 when NAFTA is almost dead and US build heavy barrier for import
Plackan Ganapathi Tom (5 months ago)
The playlist must be called, Crash course American Economics.
Diana Strasser (5 months ago)
Wouldn't it be great if Trump watched the Crash Course economics series instead of FoxNews.
rencrow (1 month ago)
Yea it even has those flashy graphics he likes so much.
Ludo (5 months ago)
"It's unlikely that the world's largest economies will return to strict protectionism." You still sure about that?
Lukeis (5 months ago)
"It is unlikely that the worlds largest economies will return to protectionism." This would have sounded so reasonable before Trump came along. But no it doesnt anymore in the Trump economy.
jose max (5 months ago)
this channel is fantabulous 👌👌👌
volce wagen (5 months ago)
What causes the exchange rate to depreciate and appreciate?
TheRealNoodles (4 months ago)
Speculators. The mainstream 'wisdom' is that trade flows causes exchange rates to move (they teach this in schools). But they are minor. Capital flows (they don't teach this in schools) have a stronger effect on exchange rate movements. So who drives capital flows? Speculators, wanting to earn high earning assets in other countries. How do they do that? By buying foreign currency. That is how exchange rate moves in the real world.
Hunter Hunter (6 months ago)
This was great, thanks, I have been researching "information about forex trading" for a while now, and I think this has helped. Have you heard people talk about - Harperzon Forexify Equalizer - (should be on google have a look ) ? Ive heard some extraordinary things about it and my friend got great success with it.
Sudheer Reddy (6 months ago)
hi
brandon jones (6 months ago)
Video sounds a bit political to me.
Ahmetcan Caglayan (6 months ago)
I majored in International Business and Trade. This video sums up all you need to know. Don't get a Bachelor's Degree. Watch these vids and you'll be ahead of most Business students.
Andrioux (6 months ago)
You forget to mention that the US also exports a lot of weapons!
carina fang (6 months ago)
STOP YOUR ADVERTISEMENT HAPPY FRESH CHEATER LIAR HORRIBLE WORST SERVICE!
Canlin Care (6 months ago)
Very funny that the largest trade partner is Canada not China^_^
Shirota (6 months ago)
The debt is owed to the country that posts the surplus. So in that case. It would be China.
jagdeesh sekar (6 months ago)
Here, in the age of trade war
heredownunder (6 months ago)
So, just stop buying stuff you don’t need?
Serena Chen (6 months ago)
Don't explain to dump people in the US🤣🤣🤣
Nathan Boyles (6 months ago)
hmmm
mu2thehotness (6 months ago)
Anyone care to explain the pros and cons of one country choosing to have either a Trade Deficit or Trade Surplus. I want to understand what sort of self interests fuels a country, to consciously try and aim for either one type of trade.
Shirota (6 months ago)
Its mostly pointless. But you absolutely do not want to post a trade deficit. Otherwise you go into debt and you have make interest rate payments to foreign countries. Im indifferent to posting trade surpluses. Because while interest rate payments are nice. Id rather spend the money on myself than loaning it out to foreign countries. But trade deficits are bad news.
Eli (6 months ago)
Show this video to Mr. Trump!
fllamber (6 months ago)
Oh, boy. if trump saw this episode...
Joshua Jones (6 months ago)
Lol, "It's unlikely a country will go back to protectionism" then along comes trump and funnily enough he is hurting the economy
Francis Emmett (7 months ago)
"Its unlikely the worlds largest economies will return to strict protectionism".... 1 year later Donald Trump is elected and Trade War is started haha. Good video tho!
jobanski (13 days ago)
I think this is a good topic to bring up because the feeling of most people is to return to strict protectionism, but I don't think they understand that strict protectionism is always a good thing.
Manjot Kohli (1 month ago)
+thugix lol ur one of the brainwashed trump kids lol
TheRealNoodles (4 months ago)
well, what Donald Trump did isn't really strict protectionism. It's just minor protectionism. He had to bail out farmers now. That's his protectionism lmao
Rhonda (4 months ago)
Trump's stated goal is to eliminate protectionism on the other side. You can't deny that counties like China put massive tariffs on US made goods. If the US can reduce or stop that practice, it would be a good thing.
thugix (5 months ago)
To clarify, the "Trade War" is Trump only putting up tariffs if other countries do not take down theirs. Trump is for true free & fair trade.
Able Maung (7 months ago)
With all this free education on YouTube, how does this affect the value of college education? It's ironic how all of these are now paid for by ads. It's like companies are paying to educate its future employees
Wanderlust (7 months ago)
Who's going to clean this up? sounds very much as if the women is responsible for cleaning thus, very patriarchic
Phil Maguire (7 months ago)
When Brexit comes around, I reckon there will be shortages and Brits will be crying out for stuff.
danny sw8 (7 months ago)
Trump should have watched this
DEVI PERSAUD (7 months ago)
i find this video very useful.
Ms.winemaker (7 months ago)
tRump administration should have you guys. HELP!!
Dustin Silva (7 months ago)
I appreciate someone took the time to create these videos, but this guy is a bit too "lax" for me to take him serious.

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