Benefits and Costs of Interdependence

Topics: Globalization, International trade, Economics Pages: 3 (824 words) Published: May 10, 2013
Interdependence is the free flow goods and services capital and finances acroos the world most countries are getting linked to the global economic system labor is free to travel from one place to another a country sell one thing to another country this is called the international trade of goods and services and also country are interferences throw financial like china is a huge lender of resources to USA and the example labor would be around the world people are going to UAE for labor to work there these are some example and explanation of interdependent Interdependent can smooth international trade and therefore, world price which is the Cheapest can spread throughout the world of developing countries. The customers will benefit a cheap price and therefore they can have savings for creation of joint funds. Though international price will reduce the domestic production, in a true competition domestic firms will benefit sovereign advantages. The domestic firms can easily outperform international firms because of the sovereign risk that exist for international firms in the home country.

The variety of products for the customers is another reason for welcoming globalization. Though primarily it will be difficult for some to have some hard time at the beginning, the continuation of globalization will make the financial markets more advance and the benefits of globalization will spread in the domestic markets to all. Financial globalization opens a chapter of various business opportunities to the investors and a door of variety in goods and services for the customers. The customers will benefit the cheapest price and the biggest variety available in the world. The reason for such prosperity is the creation of efficiency in the global market. There is always a comparative advantage between any two countries or among any three or more countries who can contribute in making a good or service in an efficient way. Therefore, globalization and integration of financial...
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