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International Trade Write for Us

When you tread into a supermarket and find bananas from Costa Rica, Brazilian coffee and a bottle of South African wine, you experience the effects of international trade.

International trade allows countries to enlarge their markets and access goods and services not available domestically. As a result of international trade, the market is more modest. This ends up resulting in more competitive prices and brings a cheaper product to the consumer.

Understanding International Trade

International trade is vital to the growth of the global economy. In a global economy, supply and demand – and therefore prices – are influenced and affected by global events.

For example, political changes in Asia can lead to an increase in labor costs. This can increase the production costs of an American shoe company based in Malaysia, resulting in a rise in the price of a pair of sneakers that an American consumer can buy at their local mall.

import and export

A good sold on the world market is called an export and a good bought on the world market is called an import. Imports and spreads are accounted for in a country’s current account section.

Global trade lets rich countries to use their resources – for example, labour, technology or capital – more efficiently. Different countries have different assets and natural resources: land, labor, capital, technology, etc.

This allows some republics to produce the same product more efficiently; In other words, faster and less expensive. Therefore, they can sell inexpensive than other countries. If a country cannot produce a good efficiently, it can obtain it by trading with another country. This is called international trade specialization.

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