Professional Documents
Culture Documents
International Trade Concepts
International Trade Concepts
economics
The effects of government policies on
trade
International finance topics
International trade versus international
finance
International economics is about how
nations interact through
◦ flow of goods and services,
◦ flows of money
◦ Policies directed at regulating these flows
◦ Effect on nation’s welfare.
International economics is an old subject,
but it continues to grow in importance as
countries become tied to the international
economy.
Open economy vs. closed economy
Free trade vs. autarky
The advantages realized from trade
international trade.
Interpersonal Trade:
◦ Trade between individuals allow people to specialize in
those areas that they can do relatively well and to buy
from others the goods/services that they themselves
cannot easily produce.
◦ Ex. A doctor and carpenter.
Interregional trade
◦ With trade between regions, each regions are forced to
specialize in those goods in which they have some
natural or acquired advantages.
◦ Ex. Plain regions, mountain regions, cold regions.
International trade is necessary to achieve the
gains that international specialization makes
possible.
Trade allows each individual, regions and