AP Economics: 15 April 2010

Prayer
Current Events:

The Make-Up Ch. 19 Short Answer Test will be on Friday. On Friday as well the 8 students who did not finish the Ch. 19 Short Answer Test will be given 5 minutes at the end of the period to finish.

The Ch. 20 Multiple Choice Test will be on the 21st.

Mann Says `Very Serious Risks' Still Remain in Economy

Bloomberg — April 14, 2010 — April 14 (Bloomberg) -- Catherine Mann, an economics professor at Brandeis University and a former Federal Reserve economist, talks with Bloomberg's Julie Hyman about the outlook for the U.S. economy and financial markets. The central bank said the economy expanded somewhat across most of the U.S. in March as consumer spending and manufacturing improved, signaling the recovery is broadening without gaining much speed. (Source: Bloomberg)

We will pick up where we began in Chapter 25.

Chapter Overview
This chapter presents the analysis of absolute and comparative advantage and employs supply and demand analysis to explain the determination of the terms of trade. Arguments regarding free trade and globalization are discussed. The chapter concludes with a section on the dynamics of trade as illustrated by trade in cashmere.
Chapter Outline

Practical Constraints on Trade
Checkpoint: The Gains from Trade
The Terms of Trade

Part 1, Terms of Trade, Absolute and Comparative Advantage Problem, 3:00

Part 2, Terms of Trade, Absolute and Comparative Advantage Problem, 1:59

This video summarizes the idea of "terms of trade" when doing a comparative advantage problem.

Determining the Terms of Trade
The Impact of Trade

CEPR Seminar: Trade - What Are the Gains and Who Gets Them, 5:23

CEPR Economics Seminar Series: Basic Economics for Policy Analysis & Self Defense

Trade - What Are the Gains and Who Gets Them

Standard economic analysis shows that efficiency gains from trade liberalization are much smaller than most people have been led to believe; at the same time developing countries make costly concessions for this trade, and within the U.S. there has been an upward redistribution of income resulting from trade policy. This session looks at who gains and loses from trade policy and how, including:

l. The high cost of protectionism - in professional services, intellectual property and other areas where government interventions that redistribute income upward
2. The trade deficit and the overvalued dollar.

How Trade Is Restricted
Effects of Tariffs and Quotas

Tariffs and protectionism, 7:00

Cf. http://www.youtube.com/watch?v=dSQTbd2iJtY&feature=PlayList&p=36F5CC591354C474&playnext_from=PL&playnext=1&index=44

Checkpoint: The Terms of Trade
Arguments Against Free Trade
Traditional Economic Arguments
Infant Industry Argument
Antidumping
Low Foreign Wages

Made in Germany | Slovenia - booming economy, low wages, 5:04

National Defense Argument

Chinese and American Fragile Trade and Economic Ties, 5:53

Globalization Concerns

Globalization and Inequality (www.cgdev.org), 2:10

Nancy Birdsall, President of the Center for Global Development gives a brief overview of the issues and concerns surrounding the growing global Inequality resulting from Globalization.

Milton Friedman - Free to Choose 1990 - 1of 5 The Power of the Market PL 2/5

Trade and Domestic Employment
Trade and the Environment
Trade and Its Effect on Working Conditions in Developing Nations
Checkpoint: Arguments Against Free Trade
The Dynamics of Trade: Cashmere
Ideas for Capturing Your Classroom Audience

Chapter Checkpoints
The Gains from Trade
Question: Since the 1990s, there has been a surge of interest in sports memorabilia. In particular, at baseball memorabilia shows, lines of people wait to pay for a baseball player’s autograph on a picture, baseball, or baseball card. All of this attention has increased the interest of kids in buying baseball cards. A natural corollary of this is the trading of baseball cards. Assume you have a set of baseball cards for the current year but are missing some. In particular, you are a Cardinals fan and have all of the Cardinals cards except Albert Pujols. Would you trade for it? If so, who would you trade with? What would you want to give up for the Pujols card? What would the Pujols card holder expect in return? Who is likely to trade a Pujols card? Do you think you could get a Pujols card by trading? Who benefits from the trade?

The point is to check that students can: apply their understanding trading baseball cards to comprehending international trade. Of particular interest is discerning that the same good might be worth more to one party than the other (which is what economists would call the “basis for trade” and how the terms of trade would be established. You can learn more about trading baseball cards at the Web site of the Baseball Card Shop, on the Web at http://baseballcardshop.net/.
The Terms of Trade
Question: When the government imposes a quota on a specific imported product,
who benefits and who loses?

The point is to check that students can: understand the costs and benefits of
restraints on trade and compare the effects of tariffs and quotas.
Arguments Against Free Trade
Question: “The biggest gains in export, imports, employment, and wages all
occurred during the 1990s, which was one of our greatest periods of economic
growth. Thus it is clear that trade benefits both consumers and the economy.”
Evaluate this statement.

The point is to check that students can: understand that trade benefits some and
imposes costs to others. This discussion also highlights the importance of context
in evaluating situations and policies (meaning, what gets attention in a recession
may not get attention when the economy is stronger).
Extended Examples in the Chapter
The Dynamics of Trade: Cashmere
Few people know that trade in cashmere has been changed dramatically by
removal of worldwide regulation of the textile industry. The winners appear to be
the Chinese, who have been developing their own cashmere industry to compete
with the previously predominant Scottish producers. As one might expect from the
analysis developed in the chapter, the effect has been competition, a loss of jobs in Scotland as the lower-cost Chinese goods have driven out the low end of what had been almost exclusively a Scottish market. Also, as one might expect, Scottish firms have been driven to increase quality and innovate. The example points out the dynamism of international trade in its effects on workers, producers, and consumers.
For another perspective on this topic, see the article by Evan Osnos titled “That
Low-Priced Cashmere Sweater Has a Hidden Cost” (The Seattle Times, December 8,
2006, available on the Web at: http://seattletimes.nwsource.com/html/nationworld/
2003498352_cashmere282.html).
Included in the article are important points about how the rise of China’s cashmere production has affected the environment, hence the “hidden cost” of the title.
Examples Used in the End-of-Chapter Questions
Question 4 references a study by Scott C. Bradford, Paul L. Grieco, and Gary Clyde
Hufbauer titled “The Payoff to America from Global Integration,” in C. Fred
Bergsten and the Institute for International Economics, The United States and the
World Economy (Washington: Institute for International Economics, 2005), Chapter
2. A follow-up article is available on the Institute’s site at http://www.petersoninstitute.
org/publications/papers/paper.cfm?ResearchID=738.
For Further Analysis
Comparing the Welfare Effects of Tariffs and Quotas
This example, as presented in the student handout at the end of this chapter, can be used as a small group exercise or as an individual exercise. It is designed to complement the text’s material on the effects of tariffs and quotas. It requires students to employ the welfare analysis used in previous chapters (you may want to assign the review from Chapter 13 in conjunction with this assignment. The handout focuses on calculating changes in consumer surplus but it is not difficult to extend it to calculations of producer surplus and deadweight losses if you wish.
Web-Based Exercise
The following assignment sends students to the Web site of the World Trade
Organization to learn more about it, particularly its functions. You can choose
whether or not to include the third part of the assignment depending on how extensive you would like the assignment to be.
Learn more about the World Trade Organization (WTO). Visit its Web site (at
http://www.wto.org) and answer the following:
1) What is the WTO?
2) Who belongs to the WTO and when was it started?
3) Choose a dispute in which the WTO was involved. Explain the issue, the
steps involved, and whether or not the issue was resolved.

Tips from a Colleague
Students tend to want simple statements like “free trade is a good thing,” and
sometimes are frustrated with having to weigh the costs and benefits. They also
may not appreciate that the degree of “protectionism” in the United States waxes
and wanes with changing circumstances, particularly having to do with jobs. You
may wish to have students investigate the positions on trade of different members
of Congress by way of making comparisons depending on the interests of the
states they represent.

References

Milton Friedman - Free to Choose 1990 - 1of 5 The Power of the Market PL 2/5

Tales Of The Wizard Of Oz: Free Trade [1961], 4:28

The Ch. 19 Short Answer Test will be Wednesday. There are ten Questions on the Test. There are no sample Test Prep questions.

Email HW to gmsmith@shanahan.org

1. Be sure to review Chapters 20-24 (we will have Tests on this material as well, TBA). Some students have asked to be tested as close as possible after covering the material.

2. Ch. 25

Question: Since the 1990s, there has been a surge of interest in sports memorabilia. In particular, at baseball memorabilia shows, lines of people wait to pay for a baseball player’s autograph on a picture, baseball, or baseball card. All of this attention has increased the interest of kids in buying baseball cards. A natural corollary of this is the trading of baseball cards. Assume you have a set of baseball cards for the current year but are missing some. In particular, you are a Cardinals fan and have all of the Cardinals cards except Albert Pujols. Would you trade for it? If so, who would you trade with? What would you want to give up for the Pujols card? What would the Pujols card holder expect in return? Who is likely to trade a Pujols card? Do you think you could get a Pujols card by trading? Who benefits from the trade?

The point is to check that students can: apply their understanding trading baseball cards to comprehending international trade. Of particular interest is discerning that the same good might be worth more to one party than the other (which is what economists would call the “basis for trade” and how the terms of trade would be established. You can learn more about trading baseball cards at the Web site of the Baseball Card Shop, on the Web at http://baseballcardshop.net/.

3. Ch. 25 Questions and Problems, p. 664-665, #11-15.

4. As review for HW, typical questions that you may encounter on the actual AP Economics Macro Test are included daily:

Review Questions (Princeton):

19. According to the Ricardian Equivalence theory,

a) the debt will never be paid off
b) most debt will be held by foreign investors
c) people place enough into savings to cover future debt repayments
d) the benefits from debt fall short of the costs
e) all nations can be expected to have roughly the same ration of debt to GDP

20. The short-run Phillips Curve indicates a

a) positive relation between unemployment and inflation
b) positive relation between price and quantity demanded
c) negative relation between price and quantity demanded
d) negative relation between unemployment and inflation
e) vertical relation between unemployment and inflation

A new set of practice questions follows:

1. Which of the following is included in U.S. GDP?

I. The value of movies made in Africa by U.S. citizens.
II. The value of olive oil made in Italy and sold in the U.S.
III. The value of blue jeans made in the U.S. and sold in Japan.
IV. The value of wine made in the U.S. by Canadian citizens.

a) II, III, and IV only
b) I and III only
c) II and IV only
d) IV only
e) III and IV only

WH II Honors: 14 April 2010

Prayer

Current Events:

German town battles Neo-Nazis

Chapter 17 The West Between the Wars 1919-1939

The Rise of Dictators

A New Era in the Soviet Union

Lenin's New Economic Policy

Soviet animated propaganda 1924 (Lenin's Kino Pravda), 4:54

The Rise of Stalin

Josef Stalin and Vladimir Lenin

Section 3 Hitler and Nazi Germany

Adolf Hitler, a failed student and artist, built up a small racist, anti-Semitic political party in Germany after World War I. Hitler's Beer Hall Putsch failed. In prison, he wrote Mein Kampf—an account of his movement and his views. As democracy broke down, right-wing elites looked to Hitler for leadership. In 1933 Hitler became chancellor. Amid constant chaos and conflict, Hitler used terror and repression to gain totalitarian control. Meanwhile, a massive rearmament program put Germans back to work. Mass demonstrations and spectacles rallied Germans around Hitler's policies. All major institutions were brought under Nazi control. Women's primary role was to bear Aryan children. Hitler's Nuremberg Laws established official persecution of Jews. A more violent anti-Semitic phase began in 1938 with a destructive rampage against Jews and the deportation of thousands to concentration camps. Increasingly drastic steps barred Jews from attending school, earning a living, or engaging in Nazi society.

Nazis:

Cf.
http://www.bbc.co.uk/schools/gcsebitesize/history/mwh/germany/nazisact.shtml

Information on Nazi Germany, Hitler

Click on "Germany Image Gallery" for the slideshow.

Cf. http://www.worldwar2database.com/cgi-bin/slideviewer.cgi?list=preludegermany.slides

Read a detailed account of the life of Hitler

Cf. http://library.thinkquest.org/19092/hitler.html

Test yourself on how Hitler came to power

Cf. http://www.schoolhistory.co.uk/lessons/riseofhitler/index.htm

Nazi propaganda posters: Election, Sower of peace, 'One People, One Nation, One Leader,' Saving for a Volkswagen, Jews, Anti-Bolshevism.

Cf. http://www.bbc.co.uk/history/worldwars/wwtwo/nazi_propaganda_gallery.shtml

Hitler and His Views Cf. http://www.pearsonsuccessnet.com/snpapp/iText/products/0-13-133374-7/audio.html?fname=audio/audio_WH07Y03252.mov

Note Taking
Reading and Listening Skills: Identify Main Ideas

As you read and listen to this section of material, summarize the section’s main ideas in a flowchart like the one below.

Hitler depicted with a member of a Nazi youth organization

In the 1930s, Adolf Hitler and the Nazi party brought hope to Germans suffering from the Great Depression. On the dark side of Hitler’s promises was a message of hate, aimed particularly at Jews. A German Jewish woman recalls an attack on her family during Kristallnacht, a night in early November 1938 when Nazi mobs attacked Jewish homes and businesses.

“They broke our windowpanes, and the house became very cold. . . . We were standing there, outside in the cold, still in our night clothes, with only a coat thrown over. . . . Then they made everyone lie face down on the ground . . . ‘Now, they will shoot us,’ we thought. We were very afraid.”

In 1923, as you may have read, Hitler made a failed attempt to seize power in Munich. He was arrested and found guilty of treason. While in prison, Hitler wrote Mein Kampf (“My Struggle”). It would later become the basic book of Nazi goals and ideology.

Mein Kampf reflected Hitler’s obsessions—extreme nationalism, racism, and anti-Semitism. Germans, he said, belonged to a superior “master race” of Aryans, or light-skinned Europeans, whose greatest enemies were the Jews. Hitler’s ideas were rooted in a long tradition of anti-Semitism. In the Middle Ages, Christians persecuted Jews because of their different beliefs. The rise of nationalism in the 1800s caused people to identify Jews as ethnic outsiders. Hitler viewed Jews not as members of a religion but as a separate race. (He defined a Jew as anyone with one Jewish grandparent.) Echoing a familiar right-wing theme, he blamed Germany’s defeat in World War I on a conspiracy of Marxists, Jews, corrupt politicians, and business leaders.

In his recipe for revival, Hitler urged Germans everywhere to unite into one great nation. Germany must expand, he said, to gain Lebensraum (lay buns rowm), or living space, for its people. Slavs and other inferior races must bow to Aryan needs. To achieve its greatness, Germany needed a strong leader, or Führer (fyoo rur). Hitler was determined to become that leader.

Reading Check

Summarizing

What main ideas does Hitler express in his book Mein Kampf?

Rise of Nazism

Adolf Hitler was born in Austria in 1889. When he was 18, he went to Vienna, then the capital of the multinational Hapsburg empire. German Austrians made up just one of many ethnic groups in Vienna. Yet they felt superior to Jews, Serbs, Poles, and other groups. While living in Vienna, Hitler developed the fanatical anti-Semitism, or prejudice against Jewish people, that would later play a major role in his rise to power.

Hitler went to Germany and fought in the German army during World War I. In 1919, he joined a small group of right-wing extremists. Like many ex-soldiers, he despised the Weimar government, which he saw as weak. Within a year, he was the unquestioned leader of the National Socialist German Workers, or Nazi, party. Like Mussolini, Hitler organized his supporters into fighting squads. Nazi “storm troopers” fought in the streets against their political enemies.

As a boy, Adolf Hitler (1889–1945) became obsessed with Germany’s 1871 victory in the Franco–Prussian War. “The great historic struggle would become my greatest spiritual experience,” he later wrote. “I became more and more enthusiastic about everything . . . connected with war.”

In school, young Hitler was known as a ringleader. One of his teachers recalled, “He demanded of his fellow pupils their unqualified obedience.” He failed to finish high school and was later crushed when he was rejected by art school.

Inflation Rocks Germany

A man uses German marks to paper his wall because it costs less than buying wallpaper. At the height of the inflation, it would have taken 84,000 fifty-million mark notes like the one below, to equal a single American dollar. Why would inflation hit middle class people with modest savings hard?

After Hitler came to power, he used his elite guard of storm troopers to terrorize his opponents. But when he felt his power threatened, Hitler had leaders of the storm troopers murdered during the “Night of the Long Knives” on June 30, 1934.

Reading Check

Explaining

What factors helped the Nazi Party to gain power in Germany?

Victory of Nazism

As World War I drew to a close, Germany tottered on the brink of chaos. Under the threat of a socialist revolution, the kaiser abdicated. Moderate leaders signed the armistice and later, under protest, the Versailles treaty.

In 1919, German leaders drafted a constitution in the city of Weimar (vy mahr). It created a democratic government known as the Weimar Republic. The constitution set up a parliamentary system led by a chancellor, or prime minister. It gave women the vote and included a bill of rights.

The republic faced severe problems from the start. Politically, it was weak because Germany, like France, had many small parties. The chancellor had to form coalitions that easily fell apart.

The government, led by moderate democratic socialists, came under constant fire from both the left and right. Communists demanded radical changes like those Lenin had brought to Russia. Conservatives—including the old Junker nobility, military officers, and wealthy bourgeoisie—attacked the government as too liberal and weak. They longed for another strong leader like Bismarck. Germans of all classes blamed the Weimar Republic for the hated Versailles treaty. Bitter, they looked for scapegoats. Many blamed German Jews for economic and political problems.

Economic disaster fed unrest. In 1923, when Germany fell behind in reparations payments, France occupied the coal-rich Ruhr Valley (roor). Germans workers in the Ruhr protested using passive resistance and refused to work. To support the workers, the government continued to pay them, and printed huge quantities of paper money to do so. Inflation soon spiraled out of control spreading, misery and despair. The German mark became almost worthless. An item that cost 100 marks in July 1922 cost 944,000 marks by August 1923. Salaries rose by billions of marks, but they still could not keep up with skyrocketing prices. Many middle-class families saw their savings wiped out.

Vocabulary Builder

passive—(pas iv) adj. not active, nonviolent

With help from the Western powers, the government did bring inflation under control. In 1924, the United States gained British and French approval for a plan to reduce German reparations payments. Under the Dawes Plan, France withdrew its forces from the Ruhr, and American loans helped the German economy recover. Germany began to prosper. Then, the Great Depression hit, reviving memories of the miseries of 1923. Germans turned to an energetic leader, Adolf Hitler, who promised to solve the economic crisis and restore Germany’s former greatness.

After less than a year, Hitler was released from prison. He soon renewed his table-thumping speeches. The Great Depression played into Hitler’s hands. As unemployment rose, Nazi membership grew to almost a million. Hitler’s program appealed to veterans, workers, the lower middle classes, small-town Germans, and business people alike. He promised to end reparations, create jobs, and defy the Versailles treaty by rearming Germany.

With the government paralyzed by divisions, both Nazis and Communists won more seats in the Reichstag, or lower house of the legislature. Fearing the growth of communist political power, conservative politicians turned to Hitler. Although they despised him, they believed they could control him. Thus, with conservative support, Hitler was appointed chancellor in 1933 through legal means under the Weimar constitution.

Within a year, Hitler was dictator of Germany. He and his supporters suspended civil rights, destroyed the socialists and Communists, and disbanded other political parties. Germany became a one-party state. Like Stalin in Russia, Hitler purged his own party, brutally executing Nazis he felt were disloyal. Nazis learned that Hitler demanded unquestioning obedience.

For assistance in understanding this section, refer to the graphic,

Why did Hitler become Chancellor?

Reading Check

Examining

Why was the Enabling Act important to Hitler's success in controlling Germany?

The Nazi State

The State and Terror

Once in power, Hitler and the Nazis moved to build a new Germany. Like Mussolini, Hitler appealed to nationalism by recalling past glories. Germany’s First Reich, or empire, was the medieval Holy Roman Empire. The Second Reich was the empire forged by Bismarck in 1871. Under Hitler’s new Third Reich, he boasted, the German master race would dominate Europe for a thousand years.

To achieve his goals, Hitler organized an efficient but brutal totalitarian rule. Nazis controlled all areas of German life—from government to religion to education. Elite, black-uniformed system of troops, called the SS, enforced the Führer’s will. His secret police, the Gestapo (guh stah poh), rooted out opposition. The masses, relieved by belief in the Nazis’ promises, cheered Hitler’s accomplishments in ending unemployment and reviving German power. Those who worried about Hitler’s terror apparatus quickly became its victims or were cowed into silence in fear for their own safety.

Economic Policies

To combat the Great Depression, Hitler launched large public works programs (as did Britain and the United States). Tens of thousands of people were put to work building highways and housing or replanting forests. Hitler also began a crash program to rearm Germany and schemed to unite Germany and Austria. Both measures were a strong repudiation, or rejection, of the hated Versailles treaty.

Spectacles and Organizations

To build for the future, the Nazis indoctrinated young people with their ideology. In passionate speeches, the Führer spewed his message of racism. He urged young Germans to destroy their so-called enemies without mercy. On hikes and in camps, the “Hitler Youth” pledged absolute loyalty to Germany and undertook physical fitness programs to prepare for war. School courses and textbooks were rewritten to reflect Nazi racial views.

The Nazis also sought to purge, or purify, German culture. They denounced modern art, saying that it was corrupted by Jewish influences. They condemned jazz because of its African roots. Instead, the Nazis glorified old German myths such as those re-created in the operas of Richard Wagner (vahg nur).

Hitler despised Christianity as “weak” and “flabby.” He sought to replace religion with his racial creed. To control the churches, the Nazis combined all Protestant sects into a single state church. They closed Catholic schools and muzzled the Catholic clergy. Although many clergy either supported the new regime or remained silent, some courageously spoke out against Hitler.

Women and Nazism

Like Fascists in Italy, Nazis sought to limit women’s roles. Women were dismissed from upper-level jobs and turned away from universities. To raise the birthrate, Nazis offered “pure-blooded Aryan” women rewards for having more children. Still, Hitler’s goal to keep women in the home and out of the workforce applied mainly to the privileged. As German industry expanded, women factory workers were needed.

To understand this material, refer to the Women in Nazi Germany diagram.

Anti-Semitic Policies

In his fanatical anti-Semitism, Hitler set out to drive Jews from Germany. In 1935, the Nazis passed the Nuremberg Laws, which deprived Jews of German citizenship and placed severe restrictions on them. They were prohibited from marrying non-Jews, attending or teaching at German schools or universities, holding government jobs, practicing law or medicine, or publishing books. Nazis beat and robbed Jews and roused mobs to do the same. Many German Jews fled, seeking refuge in other countries.

On November 7, 1938, a young Jew whose parents had been mistreated in Germany shot and wounded a German diplomat in Paris. Hitler used the incident as an excuse to stage an attack on all Jews. Kristallnacht (krih stahl nahkt), or the “Night of Broken Glass,” took place on November 9 and 10. Nazi-led mobs attacked Jewish communities all over Germany, Austria, and the annexed portions of Czechoslovakia. Before long, Hitler and his henchmen were making even more sinister plans for what they called the “Final Solution”—the extermination of all Jews.

To understand this material, refer to the
Jews in Nazi Germany diagram.

Reading Check

Summarizing

What steps did Hitler take to establish a Nazi totalitarian state in Germany?

Ch. 17 References

The Great Depression

Photo Essay on the Great Depression

Cf. http://www.pbs.org/wnet/historyofus/tools/browser12.html

Diaries of people who lived during the Depression

Cf. http://teacher.scholastic.com/activities/our_america/great_depression/

People and events of the Dust Bowl

Cf. http://www.pbs.org/wgbh/americanexperience/films/dustbowl/

Original photographs from the times

Cf. http://memory.loc.gov/ammem/fsahtml/fatop1.html

Cf. Click on links to view original documents from Mussolini's life and times.

Cf. http://www.nationalarchives.gov.uk/education/heroesvillains/g3/

Weimar:

Cf.
http://www.bbc.co.uk/schools/gcsebitesize/history/mwh/germany/weimaract.shtml

Nazis:

Cf.
http://www.bbc.co.uk/schools/gcsebitesize/history/mwh/germany/nazisact.shtml


Click on "Germany Image Gallery" for the slideshow.

Cf. http://www.worldwar2database.com/cgi-bin/slideviewer.cgi?list=preludegermany.slides

Read a detailed account of the life of Hitler

Cf. http://library.thinkquest.org/19092/hitler.html

Test yourself on how Hitler came to power

Cf. http://www.schoolhistory.co.uk/lessons/riseofhitler/index.htm

Nazi propaganda posters: Election, Sower of peace, 'One People, One Nation, One Leader,' Saving for a Volkswagen, Jews, Anti-Bolshevism.

Cf. http://www.bbc.co.uk/history/worldwars/wwtwo/nazi_propaganda_gallery.shtml

Soviet Russia

Stalin and Industrialization of the USSR
See original documents and learn more about Stalin's methods.

Cf. http://www.nationalarchives.gov.uk/education/heroesvillains/g4/

View Soviet posters

Cf. http://www.internationalposter.com/country-primers/soviet-posters.aspx

Review Stalin's takeover of power from the BBC:

Cf. http://www.bbc.co.uk/schools/gcsebitesize/history/mwh/russia/stalinsact.shtml

Find out more about jazz

Cf. http://www.smithsonianjazz.org/class/whatsjazz/wij_start.asp

How To Take Effective Notes
Email to gmsmith@shanahan.org


Wednesday: p. 546, #8-9

AP Economics: 14 April 2010

Prayer
Current Events (none today):

Today is the Ch. 19 Short Answer Test. Write your name on the Test and three blank sheets of paper to answer the ten questions (feel free to use the front and back of paper). You may write on the Test. If you finish early you may take out non-Economics material.

We will pick up where we began in Chapter 25.

Chapter Overview
This chapter presents the analysis of absolute and comparative advantage and employs supply and demand analysis to explain the determination of the terms of trade. Arguments regarding free trade and globalization are discussed. The chapter concludes with a section on the dynamics of trade as illustrated by trade in cashmere.
Chapter Outline

Practical Constraints on Trade
Checkpoint: The Gains from Trade
The Terms of Trade

Part 1, Terms of Trade, Absolute and Comparative Advantage Problem, 3:00

Part 2, Terms of Trade, Absolute and Comparative Advantage Problem, 1:59

This video summarizes the idea of "terms of trade" when doing a comparative advantage problem.

Determining the Terms of Trade
The Impact of Trade

CEPR Seminar: Trade - What Are the Gains and Who Gets Them, 5:23

CEPR Economics Seminar Series: Basic Economics for Policy Analysis & Self Defense

Trade - What Are the Gains and Who Gets Them

Standard economic analysis shows that efficiency gains from trade liberalization are much smaller than most people have been led to believe; at the same time developing countries make costly concessions for this trade, and within the U.S. there has been an upward redistribution of income resulting from trade policy. This session looks at who gains and loses from trade policy and how, including:

l. The high cost of protectionism - in professional services, intellectual property and other areas where government interventions that redistribute income upward
2. The trade deficit and the overvalued dollar.

How Trade Is Restricted
Effects of Tariffs and Quotas

Tariffs and protectionism, 7:00

Cf. http://www.youtube.com/watch?v=dSQTbd2iJtY&feature=PlayList&p=36F5CC591354C474&playnext_from=PL&playnext=1&index=44

Checkpoint: The Terms of Trade
Arguments Against Free Trade
Traditional Economic Arguments
Infant Industry Argument
Antidumping
Low Foreign Wages

Made in Germany | Slovenia - booming economy, low wages, 5:04

National Defense Argument

Chinese and American Fragile Trade and Economic Ties, 5:53

Globalization Concerns

Globalization and Inequality (www.cgdev.org), 2:10

Nancy Birdsall, President of the Center for Global Development gives a brief overview of the issues and concerns surrounding the growing global Inequality resulting from Globalization.

Milton Friedman - Free to Choose 1990 - 1of 5 The Power of the Market PL 2/5

Trade and Domestic Employment
Trade and the Environment
Trade and Its Effect on Working Conditions in Developing Nations
Checkpoint: Arguments Against Free Trade
The Dynamics of Trade: Cashmere
Ideas for Capturing Your Classroom Audience

■ Put it in context. Illustrate U.S. International Trade in Goods and Services with the graph on this Foreign Trade Statistics page from the U.S. Census Bureau. This will give students an overview of the size of U.S. trade. The page is located at:
http://www.census.gov/indicator/www/ustrade.html.
Chapter Checkpoints
The Gains from Trade
Question: Since the 1990s, there has been a surge of interest in sports memorabilia. In particular, at baseball memorabilia shows, lines of people wait to pay for a baseball player’s autograph on a picture, baseball, or baseball card. All of this attention has increased the interest of kids in buying baseball cards. A natural corollary of this is the trading of baseball cards. Assume you have a set of baseball cards for the current year but are missing some. In particular, you are a Cardinals fan and have all of the Cardinals cards except Albert Pujols. Would you trade for it? If so, who would you trade with? What would you want to give up for the Pujols card? What would the Pujols card holder expect in return? Who is likely to trade a Pujols card? Do you think you could get a Pujols card by trading? Who benefits from the trade?

The point is to check that students can: apply their understanding trading baseball cards to comprehending international trade. Of particular interest is discerning that the same good might be worth more to one party than the other (which is what economists would call the “basis for trade” and how the terms of trade would be established. You can learn more about trading baseball cards at the Web site of the Baseball Card Shop, on the Web at http://baseballcardshop.net/.
The Terms of Trade
Question: When the government imposes a quota on a specific imported product,
who benefits and who loses?

The point is to check that students can: understand the costs and benefits of
restraints on trade and compare the effects of tariffs and quotas.
Arguments Against Free Trade
Question: “The biggest gains in export, imports, employment, and wages all
occurred during the 1990s, which was one of our greatest periods of economic
growth. Thus it is clear that trade benefits both consumers and the economy.”
Evaluate this statement.

The point is to check that students can: understand that trade benefits some and
imposes costs to others. This discussion also highlights the importance of context
in evaluating situations and policies (meaning, what gets attention in a recession
may not get attention when the economy is stronger).
Extended Examples in the Chapter
The Dynamics of Trade: Cashmere
Few people know that trade in cashmere has been changed dramatically by
removal of worldwide regulation of the textile industry. The winners appear to be
the Chinese, who have been developing their own cashmere industry to compete
with the previously predominant Scottish producers. As one might expect from the
analysis developed in the chapter, the effect has been competition, a loss of jobs in Scotland as the lower-cost Chinese goods have driven out the low end of what had been almost exclusively a Scottish market. Also, as one might expect, Scottish firms have been driven to increase quality and innovate. The example points out the dynamism of international trade in its effects on workers, producers, and consumers.
For another perspective on this topic, see the article by Evan Osnos titled “That
Low-Priced Cashmere Sweater Has a Hidden Cost” (The Seattle Times, December 8,
2006, available on the Web at: http://seattletimes.nwsource.com/html/nationworld/
2003498352_cashmere282.html).
Included in the article are important points about how the rise of China’s cashmere production has affected the environment, hence the “hidden cost” of the title.
Examples Used in the End-of-Chapter Questions
Question 4 references a study by Scott C. Bradford, Paul L. Grieco, and Gary Clyde
Hufbauer titled “The Payoff to America from Global Integration,” in C. Fred
Bergsten and the Institute for International Economics, The United States and the
World Economy (Washington: Institute for International Economics, 2005), Chapter
2. A follow-up article is available on the Institute’s site at http://www.petersoninstitute.
org/publications/papers/paper.cfm?ResearchID=738.
For Further Analysis
Comparing the Welfare Effects of Tariffs and Quotas
This example, as presented in the student handout at the end of this chapter, can be used as a small group exercise or as an individual exercise. It is designed to complement the text’s material on the effects of tariffs and quotas. It requires students to employ the welfare analysis used in previous chapters (you may want to assign the review from Chapter 13 in conjunction with this assignment. The handout focuses on calculating changes in consumer surplus but it is not difficult to extend it to calculations of producer surplus and deadweight losses if you wish.
Web-Based Exercise
The following assignment sends students to the Web site of the World Trade
Organization to learn more about it, particularly its functions. You can choose
whether or not to include the third part of the assignment depending on how extensive you would like the assignment to be.
Learn more about the World Trade Organization (WTO). Visit its Web site (at
http://www.wto.org) and answer the following:
1) What is the WTO?
2) Who belongs to the WTO and when was it started?
3) Choose a dispute in which the WTO was involved. Explain the issue, the
steps involved, and whether or not the issue was resolved.

Tips from a Colleague
Students tend to want simple statements like “free trade is a good thing,” and
sometimes are frustrated with having to weigh the costs and benefits. They also
may not appreciate that the degree of “protectionism” in the United States waxes
and wanes with changing circumstances, particularly having to do with jobs. You
may wish to have students investigate the positions on trade of different members
of Congress by way of making comparisons depending on the interests of the
states they represent.

References

Milton Friedman - Free to Choose 1990 - 1of 5 The Power of the Market PL 2/5

Tales Of The Wizard Of Oz: Free Trade [1961], 4:28

The Ch. 19 Short Answer Test will be Wednesday. There are ten Questions on the Test. There are no sample Test Prep questions.

Email HW to gmsmith@shanahan.org

1. Be sure to review Chapters 20-24 (we will have Tests on this material as well, TBA). Some students have asked to be tested as close as possible after covering the material.

2. Ch. 25

■ Put it in context. Illustrate U.S. International Trade in Goods and Services with the graph on this Foreign Trade Statistics page from the U.S. Census Bureau. This will give students an overview of the size of U.S. trade. The page is located at:
http://www.census.gov/indicator/www/ustrade.html.

In a paragraph, summarize the foreign trade data that is shown there.

3. Ch. 25 Questions and Problems, p. 663-664, #6-10.

4. As review for HW, typical questions that you may encounter on the actual AP Economics Macro Test are included daily:

Review Questions (Princeton):

16. Which of the following policies might the Fed adopt to counter a recession?

a) A decrease in taxes
b) An increase in government spending
c) An increase in the discount rate
d) An increase in the required reserve ratio
e) The purchase of bonds

17. Which of the following statements would "supply side" economists disagree with?

a) Tax changes cause shifts in aggregate supply that work against shifts in aggregate demand, thus reducing the effect of the tax change on real GDP.
b) A tax cut is likely to increase aggregate supply by boosting saving, investment, and thus capital accumulation.
c) A tax increase is likely to decrease aggregate supply by decreasing after-tax wages and thus providing disincentives to work.
d) A tax cut is likely to increase aggregate supply by providing greater rewards for risk taking.
e) A decrease in tax rates does not necessarily result in a decrease in tax revenues.

18. Which of the following statements is correct in regard to the federal budget deficit and the federal debt?

a) When the debt is negative, the deficit decreases.
b) When the debt is positive, the deficit decreases.
c) The deficit is the accumulation of past debts.
d) When the deficit is negative, the debt decreases.
e) When the deficit is negative, the debt increases.

WH II Honors: 13 April 2010

Prayer

Current Events:

BIG BROTHER TV

Chapter 17 The West Between the Wars 1919-1939

The Rise of Dictators

A New Era in the Soviet Union

Lenin's New Economic Policy

Soviet animated propaganda 1924 (Lenin's Kino Pravda), 4:54

The Rise of Stalin

Josef Stalin and Vladimir Lenin, 1:57

In addition to tactics like the Terror Famine, Stalin’s Communist party used secret police, torture, and violent purges to ensure obedience. Stalin tightened his grasp on every aspect of Soviet life, even stamping out any signs of dissent within the Communist elites.

Stalin ruthlessly used terror as a weapon against his own people. He perpetrated crimes against humanity and systematically violated his people’s individual rights. Police spies did not hesitate to open private letters or plant listening devices. Nothing appeared in print without official approval. There was no free press, and no safe method of voicing protest. Grumblers or critics were rounded up and sent to the Gulag, a system of brutal labor camps, where many died.

People in History

Joseph Stalin

Stalin (trailer), 1:29

Stalin's rise from obscure revolutionary to feared leader of Russia is documented in vivid detail in this outstanding, critically acclaimed docudrama.



Five-Year Plans

The first Five Year Plan was launched in 1928, the second in 1932 and the third in 1937. Each plan laid out targets for industrial production. Targets were set for each factory in the USSR, every shift of workers and even for every individual worker.

The plans aimed at producing a surplus. Production targets were set very high to give the workers something to aim for. If workers did not achieve their targets, they were punished. Desperate factory managers fiddled the books or committed suicide as the pressure to produce more and more became too great. If the workers succeeded in reaching targets, they might be rewarded with increased wages. But usually their targets were increased as well.

Each year Stalin's government produced a report on progress. These reports were made available for foreign governments to see how successful communism was. Stalin was careful not to publicize any failures to the rest of the world. The picture that emerged from the USSR during the 1930s was one of success.

It is clear that production greatly increased and new factories, dams, railways and roads were built. However, there were problems with wastage and inefficiency in the plans. Official figures were exaggerated or gave only a partial picture of the targets met, so it is difficult to know the extent to which production increased.

Costs of Stalin's Programs

Even though Stalin’s power was absolute, he still feared that rival party leaders were plotting against him. In 1934, he launched the Great Purge. During this reign of terror, Stalin and his secret police cracked down especially on Old Bolsheviks, or party activists from the early days of the revolution. His net soon widened to target army heroes, industrial managers, writers, and ordinary citizens. They were charged with a wide range of crimes, from counterrevolutionary plots to failure to meet production quotas.

Trotsky's last office: this is a file from the Wikimedia Commons.

The most famous incident of the Great Purge occurred on 20 August 1940, when Trotsky was attacked in his home in Mexico with an ice axe (not an ice pick as is often stated) by undercover NKVD agent Ramón Mercader.

The blow was poorly delivered and failed to kill Trotsky instantly, as Mercader had intended. Witnesses stated that Trotsky spat on Mercader and began struggling fiercely with him. Hearing the commotion, Trotsky's bodyguards burst into the room and nearly killed Mercader, but Trotsky stopped them, laboriously stating that the assassin should be made to answer questions. Trotsky was taken to a hospital, operated on, and survived for more than a day, dying at the age of 60 on 21 August 1940 as a result of severe brain damage. Mercader later testified at his trial:

I laid my raincoat on the table in such a way as to be able to remove the ice axe which was in the pocket. I decided not to miss the wonderful opportunity that presented itself. The moment Trotsky began reading the article, he gave me my chance; I took out the ice axe from the raincoat, gripped it in my hand and, with my eyes closed, dealt him a terrible blow on the head.

According to James P. Cannon, the secretary of the Socialist Workers Party (USA), Trotsky's last words were "I will not survive this attack. Stalin has finally accomplished the task he attempted unsuccessfully before."

Trotsky's assassination was indicative of the brutality and ruthlessness of Stalin.

Between 1936 and 1938, Stalin staged a series of spectacular public “show trials” in Moscow. Former Communist leaders confessed to all kinds of crimes after officials tortured them or threatened their families or friends. Many of the purged party members were never tried but were sent straight to the Gulag. Secret police files reveal that at least four million people were purged during the Stalin years. Some historians estimate the toll to be much greater.

The purges increased Stalin’s power. All Soviet citizens were now well aware of the consequences of disloyalty. However, Stalin’s government also paid a price. Among the purged were experts in industry, economics, and engineering, and many of the Soviet Union’s most talented writers and thinkers. The victims included most of the nation’s military leaders and about half of its military officers, a loss that would weigh heavily on Stalin in 1941, when Germany invaded the Soviet Union.

Reading Check

Summarizing

What was Lenin's New Economic Policy?

Authoritarian States in the West
Like Germany, most new nations in Eastern Europe slid from democratic to authoritarian rule in the postwar era. In 1919, a dozen countries were carved out of the old Russian, Austro-Hungarian, Ottoman and German empires. Although they differed from one another in important ways, they faced some common problems. They were small countries whose rural, agricultural economies lacked capital to develop industry. Social and economic inequalities separated poor peasants from wealthy landlords. None had much experience with the democratic process. Further complicating the situation, tensions leftover from World War I hindered economic cooperation between countries. Each country in the region tried to be independent of its neighbors, which hurt all of them. The region was hit hard by the Great Depression.

Eastern Europe

Old rivalries between ethnic and religious groups created severe tensions. In Czechoslovakia, Czechs and Slovaks were unwilling partners. Serbs dominated the new state of Yugoslavia, but restless Slovenes and Croats living there pressed for independence. In Poland, Hungary, and Romania, conflict flared among various ethnic groups.

Economic problems and ethnic tensions contributed to instability, which in turn helped fascist rulers gain power. In Hungary, military strongman Nicholas Horthy (hawr tay) overthrew a Communist-led government in 1919. By 1926, the military hero Joseph Pilsudski (peel soot skee) had taken control over Poland. Eventually, right-wing dictators emerged in every Eastern European country except Czechoslovakia and Finland. Like Hitler, these dictators promised order and won the backing of the military and wealthy. They also turned to anti-Semitism, using Jews as scapegoats for many national problems. Meanwhile, strong, aggressive neighbors eyed these small, weak states of Eastern Europe as tempting targets.

Spain

Reading Check

Explaining

How did Czechoslovakia maintain its political democracy?

Section 3 Hitler and Nazi Germany, Preview

Section 3 Hitler and Nazi Germany
Adolf Hitler, a failed student and artist, built up a small racist, anti-Semitic political party in Germany after World War I. Hitler's Beer Hall Putsch failed. In prison, he wrote Mein Kampf—an account of his movement and his views. As democracy broke down, right-wing elites looked to Hitler for leadership. In 1933 Hitler became chancellor. Amid constant chaos and conflict, Hitler used terror and repression to gain totalitarian control. Meanwhile, a massive rearmament program put Germans back to work. Mass demonstrations and spectacles rallied Germans around Hitler's policies. All major institutions were brought under Nazi control. Women's primary role was to bear Aryan children. Hitler's Nuremberg Laws established official persecution of Jews. A more violent anti-Semitic phase began in 1938 with a destructive rampage against Jews and the deportation of thousands to concentration camps. Increasingly drastic steps barred Jews from attending school, earning a living, or engaging in Nazi society.

Weimar:

Cf.
http://www.bbc.co.uk/schools/gcsebitesize/history/mwh/germany/weimaract.shtml

Nazis:

Cf.
http://www.bbc.co.uk/schools/gcsebitesize/history/mwh/germany/nazisact.shtml

Information on Nazi Germany, Hitler

Click on "Germany Image Gallery" for the slideshow.

Cf. http://www.worldwar2database.com/cgi-bin/slideviewer.cgi?list=preludegermany.slides

Read a detailed account of the life of Hitler

Cf. http://library.thinkquest.org/19092/hitler.html

Test yourself on how Hitler came to power

Cf. http://www.schoolhistory.co.uk/lessons/riseofhitler/index.htm

Nazi propaganda posters: Election, Sower of peace, 'One People, One Nation, One Leader,' Saving for a Volkswagen, Jews, Anti-Bolshevism.

Cf. http://www.bbc.co.uk/history/worldwars/wwtwo/nazi_propaganda_gallery.shtml

Hitler and His Views Cf. http://www.pearsonsuccessnet.com/snpapp/iText/products/0-13-133374-7/audio.html?fname=audio/audio_WH07Y03252.mov

Note Taking
Reading and Listening Skills: Identify Main Ideas

As you read and listen to this section of material, summarize the section’s main ideas in a flowchart like the one below.

Hitler depicted with a member of a Nazi youth organization

In the 1930s, Adolf Hitler and the Nazi party brought hope to Germans suffering from the Great Depression. On the dark side of Hitler’s promises was a message of hate, aimed particularly at Jews. A German Jewish woman recalls an attack on her family during Kristallnacht, a night in early November 1938 when Nazi mobs attacked Jewish homes and businesses.

“They broke our windowpanes, and the house became very cold. . . . We were standing there, outside in the cold, still in our night clothes, with only a coat thrown over. . . . Then they made everyone lie face down on the ground . . . ‘Now, they will shoot us,’ we thought. We were very afraid.”

In 1923, as you may have read, Hitler made a failed attempt to seize power in Munich. He was arrested and found guilty of treason. While in prison, Hitler wrote Mein Kampf (“My Struggle”). It would later become the basic book of Nazi goals and ideology.

Mein Kampf reflected Hitler’s obsessions—extreme nationalism, racism, and anti-Semitism. Germans, he said, belonged to a superior “master race” of Aryans, or light-skinned Europeans, whose greatest enemies were the Jews. Hitler’s ideas were rooted in a long tradition of anti-Semitism. In the Middle Ages, Christians persecuted Jews because of their different beliefs. The rise of nationalism in the 1800s caused people to identify Jews as ethnic outsiders. Hitler viewed Jews not as members of a religion but as a separate race. (He defined a Jew as anyone with one Jewish grandparent.) Echoing a familiar right-wing theme, he blamed Germany’s defeat in World War I on a conspiracy of Marxists, Jews, corrupt politicians, and business leaders.

In his recipe for revival, Hitler urged Germans everywhere to unite into one great nation. Germany must expand, he said, to gain Lebensraum (lay buns rowm), or living space, for its people. Slavs and other inferior races must bow to Aryan needs. To achieve its greatness, Germany needed a strong leader, or Führer (fyoo rur). Hitler was determined to become that leader.

Reading Check

Summarizing

What main ideas does Hitler express in his book Mein Kampf?

Rise of Nazism

Adolf Hitler was born in Austria in 1889. When he was 18, he went to Vienna, then the capital of the multinational Hapsburg empire. German Austrians made up just one of many ethnic groups in Vienna. Yet they felt superior to Jews, Serbs, Poles, and other groups. While living in Vienna, Hitler developed the fanatical anti-Semitism, or prejudice against Jewish people, that would later play a major role in his rise to power.

Hitler went to Germany and fought in the German army during World War I. In 1919, he joined a small group of right-wing extremists. Like many ex-soldiers, he despised the Weimar government, which he saw as weak. Within a year, he was the unquestioned leader of the National Socialist German Workers, or Nazi, party. Like Mussolini, Hitler organized his supporters into fighting squads. Nazi “storm troopers” fought in the streets against their political enemies.

As a boy, Adolf Hitler (1889–1945) became obsessed with Germany’s 1871 victory in the Franco–Prussian War. “The great historic struggle would become my greatest spiritual experience,” he later wrote. “I became more and more enthusiastic about everything . . . connected with war.”

In school, young Hitler was known as a ringleader. One of his teachers recalled, “He demanded of his fellow pupils their unqualified obedience.” He failed to finish high school and was later crushed when he was rejected by art school.

After his attempt to overthrow the Bavarian government, for which he was in prison for less than a year, Hitler was released. He soon renewed his table-thumping speeches. The Great Depression played into Hitler’s hands. As unemployment rose, Nazi membership grew to almost a million. Hitler’s program appealed to veterans, workers, the lower middle classes, small-town Germans, and business people alike. He promised to end reparations, create jobs, and defy the Versailles treaty by rearming Germany.

Inflation Rocks Germany

A man uses German marks to paper his wall because it costs less than buying wallpaper. At the height of the inflation, it would have taken 84,000 fifty-million mark notes like the one below, to equal a single American dollar. Why would inflation hit middle class people with modest savings hard?

With the government paralyzed by divisions, both Nazis and Communists won more seats in the Reichstag, or lower house of the legislature. Fearing the growth of communist political power, conservative politicians turned to Hitler. Although they despised him, they believed they could control him. Thus, with conservative support, Hitler was appointed chancellor in 1933 through legal means under the Weimar constitution.

Within a year, Hitler was dictator of Germany. He and his supporters suspended civil rights, destroyed the socialists and Communists, and disbanded other political parties. Germany became a one-party state. Like Stalin in Russia, Hitler purged his own party, brutally executing Nazis he felt were disloyal. Nazis learned that Hitler demanded unquestioning obedience.

After Hitler came to power, he used his elite guard of storm troopers to terrorize his opponents. But when he felt his power threatened, Hitler had leaders of the storm troopers murdered during the “Night of the Long Knives” on June 30, 1934.

Reading Check

Explaining

What factors helped the Nazi Party to gain power in Germany?

Victory of Nazism

Reading Check

Examining

Why was the Enabling Act important to Hitler's success in controlling Germany?

The Nazi State

The State and Terror

Economic Policies

Spectacles and Organizations

Women and Nazism

Anti-Semitic Policies

Reading Check

Summarizing

What steps did Hitler take to establish a Nazi totalitarian state in Germany?

Ch. 17 References

The Great Depression

Photo Essay on the Great Depression

Cf. http://www.pbs.org/wnet/historyofus/tools/browser12.html

Diaries of people who lived during the Depression

Cf. http://teacher.scholastic.com/activities/our_america/great_depression/

People and events of the Dust Bowl

Cf. http://www.pbs.org/wgbh/americanexperience/films/dustbowl/

Original photographs from the times

Cf. http://memory.loc.gov/ammem/fsahtml/fatop1.html

Cf. Click on links to view original documents from Mussolini's life and times.

Cf. http://www.nationalarchives.gov.uk/education/heroesvillains/g3/

Weimar:

Cf.
http://www.bbc.co.uk/schools/gcsebitesize/history/mwh/germany/weimaract.shtml

Nazis:

Cf.
http://www.bbc.co.uk/schools/gcsebitesize/history/mwh/germany/nazisact.shtml


Click on "Germany Image Gallery" for the slideshow.

Cf. http://www.worldwar2database.com/cgi-bin/slideviewer.cgi?list=preludegermany.slides

Read a detailed account of the life of Hitler

Cf. http://library.thinkquest.org/19092/hitler.html

Test yourself on how Hitler came to power

Cf. http://www.schoolhistory.co.uk/lessons/riseofhitler/index.htm

Nazi propaganda posters: Election, Sower of peace, 'One People, One Nation, One Leader,' Saving for a Volkswagen, Jews, Anti-Bolshevism.

Cf. http://www.bbc.co.uk/history/worldwars/wwtwo/nazi_propaganda_gallery.shtml

www.1938movie.com

'1938' is available for public viewing.

'1938' is about a young German soldier named Albert Werner stationed in Austria just before the war.

Like any young soldier, Albert wants to do the right thing and serve his country well - but he soon learns that the only enemy he will be fighting are his morals, as he gets caught up in a whole world of revenge, prejudice and bitter hatred.

BACKGROUND:
1938 marked the year that Hitler made his first military move as leader of Nazi Germany.

Tensions in Austria were mounting as the people decided whether or not to join forces with their old ally.

The Austrian Chancellor attempted to hold a vote in March to decide the fate of Austria, but the Austrian Nazi party formed a takeover before it could begin, leading the way for German troops to march across the border and claim Austria for the Führer.

Hitler was declared leader overnight, without a single shot ever being fired.
When questions were asked about the legality of the takeover, the Nazis held another vote where they were awarded 99.73% in favour, to prove their right to command Austria.

The Germans had moved the first piece in the chess-game of the Second World War.|

INFO:
'1938' was filmed in 2009, directed by George Eastmead.
The film was shot on location in AUSTRIA and ENGLAND.

Albert Werner - Alex Bland
Peter - Peter Barfield
Johan - Eddie Rex
The Austrian - John Horgan

Music in the film is under the Creative Commons licence and is attributed to Jason Shaw: http://www.youtube.com/audionautix/

"1938" Copyright © 2009 George Eastmead. All Rights Reserved.

Nazi Germany Anschluss with Austria, 1938.

Soviet Russia

Stalin and Industrialization of the USSR
See original documents and learn more about Stalin's methods.

Cf. http://www.nationalarchives.gov.uk/education/heroesvillains/g4/

View Soviet posters

Cf. http://www.internationalposter.com/country-primers/soviet-posters.aspx

Review Stalin's takeover of power from the BBC:

Cf. http://www.bbc.co.uk/schools/gcsebitesize/history/mwh/russia/stalinsact.shtml

Find out more about jazz

Cf. http://www.smithsonianjazz.org/class/whatsjazz/wij_start.asp

How To Take Effective Notes
Email to gmsmith@shanahan.org


Tuesday: p. 546, #6, #7 can simply be a list instead of a diagram.

AP Economics: 13 April 2010

Prayer
Current Events:

Feldstein Says Risk of Recession Double-Dip Remains

April 12 (Bloomberg) -- Martin Feldstein, an economics professor at Harvard University, talks with Bloomberg's Lori Rothman about the outlook for a double-dip recession for the U.S. economy. The Business Cycle Dating Committee of the National Bureau of Economic Research said today it's "premature" to declare an end to the U.S. recession, which it reaffirmed began in December 2007. (Source: Bloomberg)

The Ch. 19 Short Answer Test will be Wednesday. There are ten Questions on the Test. There are no sample Test Prep questions.

We will pick up where we began in Chapter 25.

Chapter Overview
This chapter presents the analysis of absolute and comparative advantage and employs supply and demand analysis to explain the determination of the terms of trade. Arguments regarding free trade and globalization are discussed. The chapter concludes with a section on the dynamics of trade as illustrated by trade in cashmere.
Chapter Outline

Gilligan's Island intro

Comparative Advantage & Trade, 6:25

Specialization according to absolute advantage and comparative advantage, and the resulting trade patterns.

Gains from Trade

Gains from International Trade (1 of 2), 7:05

Gains from International Trade (2 of 2), 3:57

NB: at the end there is an error; the secretary will agree for a price between 1/20 and 1/4 not 1/5 and 1/4.

Trade: absolute and comparative advantage, 13:01

Practical Constraints on Trade
Checkpoint: The Gains from Trade
The Terms of Trade

Part 1, Terms of Trade, Absolute and Comparative Advantage Problem, 3:00

Part 2, Terms of Trade, Absolute and Comparative Advantage Problem, 1:59

This video summarizes the idea of "terms of trade" when doing a comparative advantage problem.

Determining the Terms of Trade
The Impact of Trade

CEPR Seminar: Trade - What Are the Gains and Who Gets Them, 5:23

CEPR Economics Seminar Series: Basic Economics for Policy Analysis & Self Defense

Trade - What Are the Gains and Who Gets Them

Standard economic analysis shows that efficiency gains from trade liberalization are much smaller than most people have been led to believe; at the same time developing countries make costly concessions for this trade, and within the U.S. there has been an upward redistribution of income resulting from trade policy. This session looks at who gains and loses from trade policy and how, including:

l. The high cost of protectionism - in professional services, intellectual property and other areas where government interventions that redistribute income upward
2. The trade deficit and the overvalued dollar.

How Trade Is Restricted
Effects of Tariffs and Quotas

Tariffs and protectionism, 7:00

Cf. http://www.youtube.com/watch?v=dSQTbd2iJtY&feature=PlayList&p=36F5CC591354C474&playnext_from=PL&playnext=1&index=44

Checkpoint: The Terms of Trade
Arguments Against Free Trade
Traditional Economic Arguments
Infant Industry Argument
Antidumping
Low Foreign Wages

Made in Germany | Slovenia - booming economy, low wages, 5:04

National Defense Argument

Chinese and American Fragile Trade and Economic Ties, 5:53

Globalization Concerns

Globalization and Inequality (www.cgdev.org), 2:10

Nancy Birdsall, President of the Center for Global Development gives a brief overview of the issues and concerns surrounding the growing global Inequality resulting from Globalization.

Milton Friedman - Free to Choose 1990 - 1of 5 The Power of the Market PL 2/5

Trade and Domestic Employment
Trade and the Environment
Trade and Its Effect on Working Conditions in Developing Nations
Checkpoint: Arguments Against Free Trade
The Dynamics of Trade: Cashmere
Ideas for Capturing Your Classroom Audience
■ Bring the global economy into your classroom. Ask students where many of the goods they use were made. The example of iPods can be used to illustrate a business decision about where to produce a product (in this case, China) based on cost. This also allows for a discussion of globalization, outsourcing, and issues of worker exploitation. (The 2006 story from Macworld might be of interest: see its Web site at http://www.macworld.co.uk/news/index.cfm?NewsID=14915. Wikipedia
provides extensive information about iPods including the reference to the
story above at http://en.wikipedia.org/wiki/IPod.) (NOTE: This was suggested
for Chapter 1. Using it here for the first time or reusing it can be effective for this topic.)
■ Put it in context. Illustrate U.S. International Trade in Goods and Services with the graph on this Foreign Trade Statistics page from the U.S. Census Bureau. This will give students an overview of the size of U.S. trade. The page is located at:
http://www.census.gov/indicator/www/ustrade.html.
Chapter Checkpoints
The Gains from Trade
Question: Since the 1990s, there has been a surge of interest in sports memorabilia. In particular, at baseball memorabilia shows, lines of people wait to pay for a baseball player’s autograph on a picture, baseball, or baseball card. All of this attention has increased the interest of kids in buying baseball cards. A natural corollary of this is the trading of baseball cards. Assume you have a set of baseball cards for the current year but are missing some. In particular, you are a Cardinals fan and have all of the Cardinals cards except Albert Pujols. Would you trade for it? If so, who would you trade with? What would you want to give up for the Pujols card? What would the Pujols card holder expect in return? Who is likely to trade a Pujols card? Do you think you could get a Pujols card by trading? Who benefits from the trade?

The point is to check that students can: apply their understanding trading baseball cards to comprehending international trade. Of particular interest is discerning that the same good might be worth more to one party than the other (which is what economists would call the “basis for trade” and how the terms of trade would be established. You can learn more about trading baseball cards at the Web site of the Baseball Card Shop, on the Web at http://baseballcardshop.net/.
The Terms of Trade
Question: When the government imposes a quota on a specific imported product,
who benefits and who loses?

The point is to check that students can: understand the costs and benefits of
restraints on trade and compare the effects of tariffs and quotas.
Arguments Against Free Trade
Question: “The biggest gains in export, imports, employment, and wages all
occurred during the 1990s, which was one of our greatest periods of economic
growth. Thus it is clear that trade benefits both consumers and the economy.”
Evaluate this statement.

The point is to check that students can: understand that trade benefits some and
imposes costs to others. This discussion also highlights the importance of context
in evaluating situations and policies (meaning, what gets attention in a recession
may not get attention when the economy is stronger).
Extended Examples in the Chapter
The Dynamics of Trade: Cashmere
Few people know that trade in cashmere has been changed dramatically by
removal of worldwide regulation of the textile industry. The winners appear to be
the Chinese, who have been developing their own cashmere industry to compete
with the previously predominant Scottish producers. As one might expect from the
analysis developed in the chapter, the effect has been competition, a loss of jobs in Scotland as the lower-cost Chinese goods have driven out the low end of what had been almost exclusively a Scottish market. Also, as one might expect, Scottish firms have been driven to increase quality and innovate. The example points out the dynamism of international trade in its effects on workers, producers, and consumers.
For another perspective on this topic, see the article by Evan Osnos titled “That
Low-Priced Cashmere Sweater Has a Hidden Cost” (The Seattle Times, December 8,
2006, available on the Web at: http://seattletimes.nwsource.com/html/nationworld/
2003498352_cashmere282.html).
Included in the article are important points about how the rise of China’s cashmere production has affected the environment, hence the “hidden cost” of the title.
Examples Used in the End-of-Chapter Questions
Question 4 references a study by Scott C. Bradford, Paul L. Grieco, and Gary Clyde
Hufbauer titled “The Payoff to America from Global Integration,” in C. Fred
Bergsten and the Institute for International Economics, The United States and the
World Economy (Washington: Institute for International Economics, 2005), Chapter
2. A follow-up article is available on the Institute’s site at http://www.petersoninstitute.
org/publications/papers/paper.cfm?ResearchID=738.
For Further Analysis
Comparing the Welfare Effects of Tariffs and Quotas
This example, as presented in the student handout at the end of this chapter, can be used as a small group exercise or as an individual exercise. It is designed to complement the text’s material on the effects of tariffs and quotas. It requires students to employ the welfare analysis used in previous chapters (you may want to assign the review from Chapter 13 in conjunction with this assignment. The handout focuses on calculating changes in consumer surplus but it is not difficult to extend it to calculations of producer surplus and deadweight losses if you wish.
Web-Based Exercise
The following assignment sends students to the Web site of the World Trade
Organization to learn more about it, particularly its functions. You can choose
whether or not to include the third part of the assignment depending on how extensive you would like the assignment to be.
Learn more about the World Trade Organization (WTO). Visit its Web site (at
http://www.wto.org) and answer the following:
1) What is the WTO?
2) Who belongs to the WTO and when was it started?
3) Choose a dispute in which the WTO was involved. Explain the issue, the
steps involved, and whether or not the issue was resolved.

Tips from a Colleague
Students tend to want simple statements like “free trade is a good thing,” and
sometimes are frustrated with having to weigh the costs and benefits. They also
may not appreciate that the degree of “protectionism” in the United States waxes
and wanes with changing circumstances, particularly having to do with jobs. You
may wish to have students investigate the positions on trade of different members
of Congress by way of making comparisons depending on the interests of the
states they represent.

References

Milton Friedman - Free to Choose 1990 - 1of 5 The Power of the Market PL 2/5

Tales Of The Wizard Of Oz: Free Trade [1961], 4:28

The Ch. 19 Short Answer Test will be Wednesday. There are ten Questions on the Test. There are no sample Test Prep questions.

Email HW to gmsmith@shanahan.org

1. Be sure to review Chapters 20-24 (we will have Tests on this material as well, TBA). Some students have asked to be tested as close as possible after covering the material.

2. Ch. 25

Bring the global economy into your classroom. Ask students where many of the goods they use were made. The example of iPods can be used to illustrate a business decision about where to produce a product (in this case, China) based on cost. This also allows for a discussion of globalization, outsourcing, and issues of worker exploitation. (The 2006 story from Macworld might be of interest: see its Web site at http://www.macworld.co.uk/news/index.cfm?NewsID=14915. Wikipedia
provides extensive information about iPods including the reference to the
story above at http://en.wikipedia.org/wiki/IPod.)

In a paragraph, summarize where the iPod is made and by whom.

3. Ch. 25 Questions and Problems, p. 663, #1-5.
(Should have finished Questions from Ch. 24 already; the page number may have been incorrect).

4. As review for HW, typical questions that you may encounter on the actual AP Economics Macro Test are included daily:

Review Questions (Princeton):

13. There is relatively more crowding out as the result of expansionary fiscal policy when

a) expansionary monetary policy accompanies the fiscal policy
b) the investment demand curve is inelastic
c) government spending improves profit expectations among businesses
d) aggregate supply is vertical
e) the investment demand curve is elastic

14. Which of the following would be considered contractionary monetary policy?

a) The purchase of bonds
b) The sale of bonds
c) An increase in taxes
d) An increase in government
e) A decrease in the discount rate

15. In what ways is contractionary fiscal policy in the U.S. likely to affect domestic interest rates and the international value of the dollar?

a) Interest rates increase and the dollar depreciates.
b) Interest rates decrease and the dollar appreciates.
c) Interest rates increase and the dollar appreciates.
d) Interest rates decrease and the dollar is not affected.
e) Interest rates decrease and the dollar depreciates.