B. Understand why trade occurs. C. Understand who benefits from trade and why. D. Understand how trade influences job creation and industrial competitiveness. Agricultural trade contributes employment, income, and economic activity to the U.S. economy. Estimated trade-impact multipliers for 1996 indicate that to produce one million dollars of agricultural exports requires 15 workers.
Imports generate jobs and create economic activity.
One way to understand why trade occurs and what benefits it brings, is that nations do not engage in international trade, but rather the individual consumers and businesses within nations do. When an individual in the U.S. buys a Japanese-manufactured stereo component, he or she has engaged in international trade. This participation occurs indirectly through the power of consumer preferences and the competitive pressure faced by the retailers to satisfy them. When a manufacturing firm buys some of its inputs from foreign sources, it also engages in international trade. The power of competition and individual choice are the core of American economic philosophy and the primary forces that have enabled U. S. citizens to achieve a high standard of living.