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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: 115

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

Trade Efficiency

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

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?

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

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?

International Trade and Inflation

Consider a scenario where you are an entrepreneur planning to expand your production of kitchen gadgets. You need to pay back a loan of $5,000,000 over five years. The interest rate is 5% and your other operational costs are $10,000,000 per annum. The first year after the investment your sale is 95,000 boxes of kitchen gadgets a

Gov't Market Failure - Case Study

I am in need of help with the below questions. The questions are based on the case study listed under question number 5. The questions are to be answered with the topic of Micro- Governement and Market Failure. 1. Why do farmers in the U.S. demand such research efforts? 2. Is this another form of a price support system

Effect that reducing protection will have on factor prices

Possible models: Strategic trade theory, Krugman model, Rybczynski theory, Stolper-samuelson and Heckscher-Ohlin model and the optimal tarriff theory. a. explain some models that predict the effect that reducing protection (Tariffs) will have on factor prices (Labour and capital)? Use these models to analyse the effect that

Which market structure is more applicable for the market for building commercial aircrafts, when there are two major manufacturers of the commercial airplanes and little possibility of entry by new firms

1. Based on your reading, which market structure is more applicable for the market for building commercial aircrafts, when there are two major manufacturers of the commercial airplanes and little possibility of entry by new firms: a. perfect competition b. monopoly c. oligopoly d. monopolistic competition 2. Based on your

Please check my answers Thank you

Which of the following is a normative statement? a. international trade leads to expanded consumption opportunities, b. higher expenditures on health care will reduce infant mortality rates c. we would all be better off if we could reduce our dependence on oil imports d. increased defense spending will lead to higher budge

Countervailing and Antidumping

Describe the difference between countervailing duties and antidumping duties. Has the United States ever imposed such duties?

Can the Specific Factors Model or the Heckscher-Ohlin Model explain the position of the developing countries? What about the developed countries? Explain how these two positions are or are not consistent with these models.

Below is an excerpt from a September 10, 2006 Associate Press article on the breakdown of global trade negotiations. The G-20 issued a statement Saturday indicating developing nations we unlikely to back off their demands that developed nations do away with subsides and tariff barriers from their farm products. "Most of t

U.S. Trade in Goods

1.Travel to France with $3000, exchange for Euros, spend 1080 Euros in France. Go to Russia spend 2500 rubles, go to Britain spend 399 pds, return to US. How many dollars did you spend.? 2.When the U.S. imposes a tariff or quota on imports, who pays it? Who benefits from a tariff or quota? What is the impact of a trade surpl