How has international Trade undergone a sea Change in the last fifteen years?
Answers
Answer:
International trade allows countries to expand their markets for both goods and services that otherwise may not have been available domestically. As a result of international trade, the market contains greater competition, and therefore more competitive prices, which brings a cheaper product home to the consumer.
Explanation:
International trade gives rise to a world economy, in which supply and demand, and therefore prices, both affect and are affected by global events. Political change in Asia, for example, could result in an increase in the cost of labor, thereby increasing the manufacturing costs for an American sneaker company based in Malaysia, which would then result in an increase in the price charged at your local mall. A decrease in the cost of labor, on the other hand, would likely result in you having to pay less for your new shoes.
A product that is sold to the global market is called an export, and a product that is bought from the global market is an import. Imports and exports are accounted for in a country's current account in the balance of payments.
Global trade allows wealthy countries to use their resources—whether labor, technology or capital— more efficiently. Because countries are endowed with different assets and natural resources (land, labor, capital, and technology), some countries may produce the same good more efficiently and therefore sell it more cheaply than other countries. If a country cannot efficiently produce an item, it can obtain the it by trading with another country that can. This is known as specialization in international trade.