What is International Trade?
Nowadays, the modern economy has a dramatically increase, and also the economic globalization has been formed. Trade, especially international trade has become the most important role in the world economy. Trade is the voluntary exchange of goods, services, assets or money between one person or organization and another. Through the trade, both parties believe they will gain the benefit from the exchange. International trade is trade between residents of two countries (Mahoney, Trigg, Griffin, & Pustay, 2001). International trade in most cases represents a country gross domestic product (GDP). International trade has a direct or an indirect importance on the economies of a nation. Such trade could be between individuals, firms, or residence of two countries. Countries engage in international trade because export sparks additional economic activities in the domestic market, such as jobs creation and income provision. Import on the other hand can pressure domestic supplier to cut their prices and improve their quality. Failure to respond to foreign competition may leads to companies shut-down, and unemployed workers. The buying and selling of goods and services across national borders is known as international trade. It is the economic transactions that are made between countries. International trade is the backbone of our modern, commercial world, as producers in different nations try to profit from an expanded market, rather than be limited to selling within their own borders. It is all about imports and exports. It exists because some nations are expert at producing certain products at a cost-effective price. Perhaps it is because they have the labor supply or abundant natural resources which make up the raw materials needed. It is the ability of some nations to produce what other nations want is what makes foreign trade work. There are many reasons that trade across national borders occurs, including lower production costs in one...
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