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The intertemperal model can be used to explain the War in Iraq. The current use of American soldiers, equipment, and money to “liberate Iraq” can be viewed as the current goods being traded to the new republic of Iraq. As the intertemperal model holds, current goods or services are always exchanged for future goods or services. The intertemporal model also holds that relative prices are equal and that there are no barriers to trade, and no transportation costs associated with trade. Although in our real-life example there are costs associated with trade, they can be eliminated as they are incorporated in the costs of the war effort headed up by the United States. The cost of mobilizing the armed forces of the United States and shipping them halfway around the world can be incorporated in the overall cost of the war effort (the services provided), as opposed to a cost of transportation as there would be if goods were being transported by a boat or plane.
Approximate Word count = 460
Approximate Pages = 1.8
(250 words per page double spaced)
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