International+Trade

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= TRADE =

== Trade is the transfer of ownership of goods and services from one person to another **. Nowadays in our changing world** International and Domestic Trade **have had a strong impact on the society.**== =**If we t****ake a loo** **k International Trade is the exchange of capital, goods and services across international borders. This type of trade is quite necessary in our developing world, but on the other hand we have Domestic Trade which is the exchange of goods and services within the same country.** = = The differences between them? Unlike International Trade, Domestic Trade is carried out inside the same nation, without crossing its borders. =

= **International Trade** = I**nternational Trade is the exchange of goods and services between nations. This type of trade gives rise to a world economy, in which prices or supply and demand, affect and are affected by global events. The main objective of International Trade is to offer the products available in a country to another that is not available in order to satisfy the domestic demand like food, clothes, oil etc.** ** Any resource, intermediate good, or final good or service that buyers in one country purchase from sellers in another country is an import, and any intermediate good, or final good that producers in one country sell to buyers in another country is an export; a nation that exports more will grow stronger. If a country cannot efficiently produce an item, it can obtain the item by trading with another country that can. As it opens up the opportunity for specialization (a method of production in which companies focus on a limited number of products and services which they can do best) and therefore more efficient use of resources, International Trade has potential to maximize a country’s capacity to produce and acquire goods. International Trade also has two contrasting views regarding the level of control placed on trade: free trade and protectionism. Free Trade is the type of market in which goods and services cross borders freely, unrestrained by tariffs or any other sort of barrier to trade, and protectionism exists in many different forms, but the most common are tariffs, subsidies, quotasand regulations that discriminate against foreign businesses. These strategies attempt to correct any inefficiency in the International market. **

**Global economics, global exchange: ** **Video outline. ** === Main idea : There are several reasons why specialization and trade are beneficial for a country Key concepts : Comparative advantage : E mphasizes the d ifferences in countries resources and productivity levels Economy of scale : Is the degrade of the scale of production, making the production more efficient or lower cost per unit of output Example ===
 * < **Countries** ||< **Products** ||< **Reasons for specialization** ||
 * < ===PAKISTAN=== ||< ===Rice and Mangoes=== ||< ===Warm weather=== ||
 * < ===SWEDEN=== ||< ===Paper and steel=== ||< ===Cold weather, forests and===

iron
|| === Main idea : In order to have a Comparative Advantage in a country, it must be able to produce at a lower opportunity cost, relative to another country Key concepts : Opportunity cost : Forgone opportunity to produce another good An example of opportunity cost is: If you decided to buy a CD (10$) you wouldn’t be able to go out for dinner or buy a T-Shirt, because you have decided to pay for the CD price, already instead of buying a T-Shirt Complete the chart with the corresponding information ===
 * Country || No. jeans produced || No. cars produced || Opportunity cost ||
 * ===UNITED STATES=== || ===10=== || ===20=== || ===2 cars, one pair of jeans=== ||
 * ===CHINA=== || ===6=== || ===6=== || ===1 car, one pair of jeans=== ||

Example:

 * === Type of country ===

(Example)
|| === Type of workforce === || === Type of industry === || === Example of product === ||
 * ===Industrialized Countries=== || ===Skilled=== || ===Capital Intensive=== || ===Automobiles, High- Tech Products=== ||
 * ===Non- Industrialized Countries=== || ===Unskilled=== || ===Labour Intensive=== || ===Textiles, Basic Staples=== ||