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Share the Wealth: Teaching tips for international economics
Yet it's not only consumers at the breakfast table who feel the influence of foreign trade. Exports of goods and services support more than ten million jobs in the United States, the largest trading nation in the world. This figure includes almost 30 percent of all jobs in manufacturing and nearly a million jobs supported by exports of agricultural products. More than five million Americans are employed by foreign companies operating in the United States, whose total capital investment in our country exceeds one trillion dollars.
As world trade makes the world smaller, it is important that students understand the basic concepts of international trade and how global trade policies affect their lives. The concepts of comparative advantage, trade barriers, and exchange rates are not the easiest topics in economics, but creative teaching methods can enhance students' understanding, improve assessment outcomes, and allow students to interact with the material in ways that make learning fun.
John McGeough, an economics and government teacher at Palm Bay High School in Melbourne, Florida, asks his students to think about specialization. Using the example of a sports team, he says that to be efficient and productive, a sports team has players play certain positions—they specialize. He also uses the example of a house painter and a brain surgeon to talk about specialization. Students easily understand that they wouldn't want a brain surgeon wasting time and talents painting houses—or for that matter, a trained house painter performing brain surgery. Although the brain surgeon could paint his or her own house, the opportunity cost makes it smarter for the surgeon to hire the house painter. Likewise, back to the sports team, professional athletes' time is more valuable on the field or court, not in performing household tasks such as house painting or yard work.
Anna Vanlandingham, economics teacher at Lake Mary High School in Lake Mary, Florida, has created her own unit on international economics titled the "Global Marketplace." She begins every unit by asking students their opinions on globalization, including their beliefs on buying American and the effect that globalization has on jobs. Students then list the origin of five items they are wearing and see if their purchases support their beliefs. This exercise allows students to think about how globalization affects their lives. Next, students look for the origin of items around the classroom, using maps to record the origins. Vanlandingham also has students participate in a hands-on lesson demonstrating the effects of specialization before she teaches the concepts of comparative and absolute advantage. The last lesson in the unit involves students researching prices of the items they found in the classroom, and tracking their price in another country's currency at five different dates during the previous year. Students then chart the changes in the exchange rate over time. This activity serves as a springboard for a discussion on how currencies appreciate and depreciate.
When Lesley Mace, economic and financial education specialist at the Jacksonville Branch of the Federal Reserve Bank of Atlanta taught high school and college economics in Alabama, she would introduce the topic of trade by starting off with a guessing game. She would challenge students to name the United States' number-one trading partner. (No, it's not China—at least not yet!) Students can find statistics on world trade and even state trading data on the website of the U.S. Census Bureau. Students were surprised to learn that the number one export of their state was not cotton, but cars. (Florida students are similarly surprised to learn that citrus fruit does not even make the top 25 list for Florida exports—and that the number one destination for those exports is ….Switzerland! )
Another favorite activity of the Alabama students was known as the Candy Game , an exercise in which students learn about the benefits of free trade by trading pieces of candy. Students are assigned to groups, with each group representing a particular type of candy (Starburst, Jolly Rancher, etc.). Mace would give students a piece of their group's type of candy and ask them to rate from 1 to 10 their satisfaction with the candy they received. They would then trade for a different flavor of candy from within their group, and then in the next round with members of another group. At each stage of the game, groups record their total satisfaction levels with the candy they were able to trade for. The exercise ends with "free trade," when all students can trade with anyone else in the room. Students see that as resources (the candy, in this game) move to their most highly valued use, they were better off and their satisfaction increased, lending meaning to the phrase "trade lifts all boats."
By Lesley Mace, economic and financial education specialist, Jacksonville Branch of the Federal Reserve Bank of AtlantaNovember 2, 2011
- Lesson Plan: Globalization
- Lesson Plan: Show Me the Euro
- Lesson Plan: Global Marketplace
- Extra Credit: Globalization: The Trade Offs of Free Trade
Related Links On Other Sites
- Lesson Plan: Illustrating Trade in the Classroom
- Comparative Advantage Online Student Course (St. Louis Fed)
- U.S. Census Bureau Foreign Trade Statistics
- World Trade Organization
- Office of the U.S. Trade Representative
- International Economic Update (Dallas Fed)