Chapter 37 International Trade

Why do countries trade ? 

• to obtain goods that they cannot produce domestically 

• to obtain goods that can be brought more cheaply from overseas

• selling off unwanted commodities 

• buy unwanted goods 

what are the advantages of trade?

• competition for domestic businesses

• unemployment

• poverty

• lower prices and increased choice for consumers

What are the disadvantages of trade?

• lower input prices

• wider markets for businesses

• more choice for consumers

• unemployment

what is meant by free trade ?

• exports are transported free of charge

• commissions for changing currency are waived for international trade transactions

• A government allows open access to all markets in its country

• international transactions are free of indirect taxes such as VAT

What is International trade ?

• buying and selling of goods

• import and export of goods and services

• import and export of goods

• buying and selling of goods and services