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International Trade

International trade is the exchange of goods and services between different countries. Trading with foreign countries gives both consumers and suppliers the exposure to resources that are not available in their own country. A product that a country sells to the global market is an export and a product that a country buys from the global market is an import. Imports and exports are included in a country’s current account via the balance of payments.

Without trade, countries would have to be self-sufficient and rely only on their own resources. International trade gives a country the opportunity to specialize in what they produce the best and satisfy their other needs from trading. Through specialization in products that a country has a comparative adavantage in, a country can increase it's production possibilities - this is termed “gains from trade". Different from comparative advantage, absolute advantage is when a country is able to produce a good at a lower absolute cost than another country. Comparative advantage is when a country can produce a good with less forgone output of other goods than another country.

Exchange rates and trade agreements are two important variables in international trade. The exchange rate refers to the number of units of domestic currency needed to purchase one unit of foreign currency. A trade agreement is an agreement made between two or more countries on the conditions of trading goods and services. These facilitate international trade and sometimes creates restrictions and constraints on international trade. 

Categories within International Trade

Exchange Rates

Postings: 235

The exchange rate is the number of units of domestic currency needed to purchase one unit of foreign currency

Trade Agreements

Postings: 114

A trade agreement is an agreement made between two or more countries on the conditions of trading goods and services.

Challenges of Expansion to a Foreign Location

5-3-16: I need your help getting this paper going. Determining a good foreign market to expand the auto industry into, the competition faced in that market, growth of the population, GDP, exports, and sales. Similiar to how you have helped me in the past. You provide good background info and then I'm able to expand on it through

Comparative and Absolute Disadvantage

Illustrate, using a hypothetical scenario (data), how a nation could have an absolute disadvantage in the production of two goods and could still have a comparative advantage in the production of one of them.

Import-substitution strategy

What are the advantages and disadvantages of using import-substitution to accomplish industrialization rather than using government aid and private investment to develop new manufacturing industries?

Comparative advantage vs. absolute advantage

Are there any similarities between the principle of comparative advantage and absolute advantage? Are there any differences between the two principles? What are the sources of comparative advantage? What the sources of absolute advantage? What is the basis for specialization? What is the gain from trade?

Trade with another Country

The company you work for is expanding its business and would like to begin to trade with another country. Original only please with about 800-950 words. Go to "2012 National Trade Estimate Report on Foreign Trade Barriers" for specific country information. The URL for this link is: http://www.ustr.gov/about-us/press-offic

Analyzing Trade Restrictions

Lists three arguments for trade restrictions. Since economists do not favor trade restrictions, make the case as an economist against trade restrictions for these three items. Are there any arguments for trade restrictions that most economists would support? Discuss.

Taxing consumables

1. A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it a. maximizes total revenue for firms and maximizes the quantity supplied of the product. b. maximizes the combined welfare of buyers and sellers. c. minimizes costs and maximizes profits of sellers. d. mi

Markets, International Trade, and the Government

You are given the following scenarios for consideration: Scenario 1: Assume that the government imposed a price ceiling on gasoline in order to prevent prices from getting too high. What are the economic implications of this action in the gasoline markets? Scenario 2: Assume that the government imposed a price floor on w

Marketing a Product

My company has just developed a new sports drink that is in a container which will keep it cool for up to 6 hours. I'm looking for 6-8 paragraphs to help make this clear... How you would market the product? These are some of the topics I came up with that perhaps you could touch on with some references... Market su

International Trade Tariffs and Quotas

Identify to what extent tariffs or quotas would affect international trade in whirlpools products. How would you pay for imports, receive payment for exports, and manage exchange rate risk? Please indicate the source(s) of all data.

Trade Efficiency

Explain how international trade increases economic efficiency and how trade barriers and tariffs inhibit efficiency.

First versus Second Best

"The theory of the second best leaves welfare economists 'high and dry' since not only does it abolish the established objectives of first-best conditions, but it also gives virtually no clue as to where the second-best position is, or even the appropriate direction of departure from first-best criteria". Discuss.

MNEs and International Trade Payments

Analyse the choices MNEs have for handling international trade payments. What are the main issues that affect their decisions? Explain your answer. See Shenkar and Luo, 2008, International Business pp. 379-384.

One of your relatives suggests to you that our country should stop trading with other countries because imports take away jobs and lower our national well-being. How would you try to convince him/her that this is probably not the right way to look at international trade and its effects on the country?

One of your relatives suggests to you that our country should stop trading with other countries because imports take away jobs and lower our national well-being. How would you try to convince him/her that this is probably not the right way to look at international trade and its effects on the country?

WTO and international trade

What is the WTO and how does it relate to international trade? How many countries belong to the WTO? What did the Uruguay Round (1994) of WTO trade negotiations accomplish? What is the name of the current WTO round of trade negotiations?

Nash equilbrium & Prisoner Dilemma

1. Consider the following information, and answer the question below. China and England are international trade partners. The following data are expected payoffs for the two countries. Both China and England use a tariff; payoff equals -25 for both nations. Both China and England allow free trade; payoff equals 25 for both

International Trade

Please help me to get an idea about these questions: 1) China and Japan have two factors of production, land and labor. Both countries produce two goods, corn, which requires more land, and computers, which requires more labor. Given that China is abundant in land and Japan is abundant in labor, what will be the effect on the

Business Recommendations Based on Economic Projections

Choose an organization for your final project. You may choose among the Larson Scenario located on your student Web site, Review the data for the organization you have chosen. Provide pricing strategy recommendations, recommendations for nonprice barriers to entry, and ideas for product differentiation for the organization

Trade deficit and interest rates

Evaluate whether the following statements are True or False, and explain your answer: a. A trade deficit occurs when the government spends more than it receives in tax revenue b. An increase in interest rates in the rest of the world will lead to a stronger dollar

Tax Burden

1. The Incidence of the Tax Identify and explain the factors that determine who actually bears the burden of a tax increase on a specific good, such as gasoline, cigarettes, or some other product. Use at least two examples in your response. Is the incidence of the tax a consideration when government imposes this tax increase? W

What did Adam Smith mean when he wrote "Seldom do businessmen of the same trade get together but that it results in some detriment to the general public"?You may also wish to discuss the behavior of an oligopoly using an example such as -OPEC -U.S. automotive industryHow are these oligopolies alike and different?

What did Adam Smith mean when he wrote "Seldom do businessmen of the same trade get together but that it results in some detriment to the general public"? You may also wish to discuss the behavior of an oligopoly using an example such as -OPEC -U.S. automotive industry How are these oligopolies alike and different?

Increased International Trade: Effects on Consumers

The world is becoming increasingly interdependent, and the bank's customers have increasing choices in where and how they do their banking. My manager wants to know whether the benefits of globalization outweigh the costs for the bank. Describe one way increased international trade has benefited U.S. consumers. Then, describe a

volume and terms of trade

Suppose that, from an initial equilibrium position in the offer curve diagram, country I imposes a tariff on country II's export good at the same time that consumers in country II change their tastes toward wanting more of II's export good. Illustrate and explain the impact of these two simultaneous events on country I's volume

IMF

International Monetary Fund data indicate that, with 2000 = 100.0, Japan's export price index in 2006 was 95.3, its import price index in 2006 was 127.2, its export quantity index in 2006 was 142.4, and its import quantity index in 2006 was 120.0. Given this information, a calculation of Japan's "income" terms of trade for 2006

Growth of nations

Explain why you agree or disagree with the following statements: a. A country that grows faster than its major trading partners can expect the international value of its currency to depreciate. b. A country 's currency will appreciate if its inflation rate is less than that of the rest of the world.

Global Civil Society and International Law

Describe and assess how international law has addressed matters of trade, human rights, and the environment. How have these efforts contributed to developing or retarding the construction of global civil society? Why?