How does external trade improves the standard of living of the people?
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The import and export trade thus, help in raising standard of living of a country. External trade enhances competition, which compels the domestic firms to improve technology of production, production process and quality of the products.
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When goods are produced in one country and sold in another, international trade occurs.
- In general, international trade allows countries to focus on the industries in which they can be most productive and efficient.
- In this way, trade often raises the standard of living of both producers and consumers.
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