1 What Features Distinguish International From

Topics: International trade, Inflation, Export Pages: 1 (391 words) Published: November 10, 2014
1. What features distinguish international from domestic transactions? There are several differences between international transactions and domestic transactions , such as exchange policies ,commercial policies ,different domestic policies ,statistical data ,relative immobility of productive factors ,marketing considerations and so on. First, exchange rate ,an exchange rate is the price of one currency in terms of another ,it is used to translate values from one currency to another .International transactions require payments or receipts in foreign currencies ,and these may be converted to the domestic currency through the exchange rate. Second, commercial policies , which are governmental measures designed to influence the country’s international transactions. A national government can introduce a variety of restrictions upon international transactions that cannot be imposed on domestic transactions, these include: tariff, import quota, export subsidy, exchange control, VER voluntary export restraint. Third, domestic policies, each country has its own central bank and finance ministry, and hence its own monetary and fiscal policies. These in turn determine its rate of inflation, economics growth, and unemployment. They vary from one another. Fourth, statistical data, we often know more about the composition size, the direction of international trade. There are no “border checkpoints” in domestic, import and export declaration : weight ,value, destination or source, etc. Fifth, relative immobility of productive factors, production factors are much more mobile domestically .But immigration restrictions, language barriers, and different social customs constitute formidable barriers to people’s mobility between countries. Capital can move more easily domestically. What’s more, marketing considerations. Differences in demand patterns, sales techniques, market requirements, and the like make international transactions more difficult than domestic ones. Exporters...
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