Professional Documents
Culture Documents
Trade Is One of The Integral Components of Ending Global Poverty
Trade Is One of The Integral Components of Ending Global Poverty
1. Trade is one of the integral components of ending global poverty. Countries that are
more liberal with its policies regarding international trade tend to grow faster, innovate,
improve productivity and provide higher income and more opportunities to their people.
International Trade is essential for smaller economies countries as it opens up gates for
the country helps develop their economy and raise their GDP. Integrating your economy
with global economy through trade helps promote economic growth and reduce poverty
locally and globally. Trade brings jobs and opportunities in a country and helps drive
competition which ensures that the best product is being offered to its consumers, it
injects global competitiveness and hence the local businesses become very efficient due
to being exposed to international competition. Open trade benefits lower tier
households by offering them cheaper goods and services. Countries like Bosnia,
Macedonia and Herzegovina are very dependent on their trade and is the driving factor
of their economy. Bangladesh trades globally as it has a comparative advantage on the
production of apparel clothing and due to this it engages in about 32,000-million-dollar
worth of exports. This activity boosts their economy and drives growth and innovation.
India was a closed economy in the 1960s and 70s, there has not even 1% decline in the
poverty level however since India opened its doors to trade there has been a drastic drop
in poverty level and a rapid growth in economy.
4. A. China has absolute advantage in production of cloth. China has absolute advantage in
production of wheat.
B. Pakistan has comparative advantage in production of cloth. China has comparative
advantage in production of wheat.
C. If Pakistan and China trade, China would produce more of Wheat in which it has a
comparative advantage and has a better unit labor productivity of, this would lead to
maximum amount of goods being produced in the lowest amount of cost giving china a
comparative advantage against the world. Pakistan would also invest more labor in the
manufacturing of cloth in which it has comparative advantage which would lead to more
cloth being manufactured.
6.
7.