1. why is an understanding of international trade important to you 2. what major
ID: 1119501 • Letter: 1
Question
1. why is an understanding of international trade important to you
2. what major events have contributed to a drastic change in the world economy during the last two decades? what general impact have these changes had on the world economy?
3. what is the distinctive features of international trade? what are the differences between international trade and domestic trade? Explain?
which countries are the major trading nations? what factor contributed to the deterioration of the united states trade position prior to the late 1980's explain?
What factors have to the growth of global market in recent years? what is the impact of the globalization on developed and developing countries ? explain using some examples
what is the significance of international trade to the world economy
Explanation / Answer
1. International trade is the process of moving to an international market . The international market is a market where goods and services are freely traded. The international trade has the ability to increase the wealth of Nations and standard if living of people.
2. a) 2001 terrorist attack:
Due to this event the economic climate completely changed. The New York Stock exchange was shut down for a period. There were many losses of human life.
b) Corporate fraud :
Enron and Arthur Anderson were caught in a corporate fraud and scandel that gave rise to bankruptcy of Enron and dissolution of Arthur Anderson.
3. The features are -
a) . Separation of buyers and producers .
b). Foreign currency.
C). Import and export Restrictions.
d). Risk involved in foreign trade is higher.
e). Unever distribution of Natural Resources.
f). Division of labour and specialization.
g). Difference in economic growth rate.
h). Theory of Comparative cost.
Exchange of goods and services accross countries and between countries is called international trade. When the exchange is conducted inside of a country's border then it's called domestic trade.
Last year China was in first position. It was the world's largest merchandise trader. US was in second place followed by Germany.
The factors contributed to trade position are rise in the value of dollar and slow growth in trading partners. Moreover the interest payments required to service their growing foreign debt are becoming a significant negative factor in the current account balance.
Factors for the growth of global market in recent years are -
a). Growth and risk management in emerging markets.
b). Labor productivity and talent management.
c). Global flows of goods, information and capital.
d). Natural Resource Management.
Impact of globalisation on developed and developing countries -
Foreign Direct investment has a positive impact on developed countries. Economic gains from globalisation increase the standard of living and life expectancy of developing countries. There can be also negative impacts like spread of new diseases in developing countries.
Significance - a) greater variety of goods for consumption is available. b). Efficient allocation and better utilization of resources. c). Promotes efficiency in production.
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