Why would a country such as the United States, which can presumably produce everything it needs itself, choose to trade with other nations?© BrainMass Inc. brainmass.com October 25, 2018, 9:18 am ad1c9bdddf
In general, countries trade with each other because of an economic concept known as comparative advantage. According to the law of comparative advantage, a country should focus on (specialize) in producing and exporting resources which it can produce at the least opportunity cost and import the resources for which it is a high cost-producer.
To further understand this concept, let me explain what opportunity cost means. Opportunity cost can be remembered as what you give up/ what you gain. It is simply the cost of something forgone ...
Gains in trade through comparative advantage. Why nations trade with each other.
Global Business, trade deficit and surplus, and regional trading blocs.
I need assistance answering the following questions based on factual data/information.
1. What are some of the technological advances in telecommunications and transportation that have impacted global business in the last decade? How have these technological advances affected regional economic development? What trends can be anticipated in these areas?
2. What is a trade deficit and a trade surplus? What are the implications of a long-term trade deficit or trade surplus? What techniques are available to correct Balance of Payment Deficit or Surplus?
3. What are some regional trading blocs? What factors contribute to the formation of Trading Blocs? How would you evaluate the attendant benefits of trading blocs?