Question

What is mean by foreign trade

Answer 1

$\huge\mathscr\red{Hey \: Mate}$

The trade in which foreign company invest into a country.

Hope it will help you ☺️

Answer 2

Generally,foreign trade or international trade refers to the commercial trading or exchange of various goods and services between different countries across the world in the international market.

Explanation:

• Foreign trade,also referred to as international trade involves commercial trading and exchange of different goods and services across international borders and between various countries around the world.
• In any open economy,foreign trade as a whole or including both export and import of various goods and services constitute a significant part of the overall GDP thereby contributing to the economic growth.
• Based on the traditional theory or notion of international or foreign trade,the import and export level of any country ideally depends on the available resource endowment of competitive advantage in the international market.
• In this context,the countries with higher resource endowment or any factor/input required for the production of any particular good or service will produce excess or abundance of that good or service in the domestic economy which can be sold in in the international market in the form of export and generate foreign reserve or revenue by selling the good to various foreign countries.
• Alternatively,any country lacking the same set of resource endowment or factor inputs will under produce that particular good or service due to low availability of required productive resources or factors/inputs of production.Hence,to adequately satisfy its domestic demand for that particular good or service,it will buy or purchase the good or service from various other countries in the world which is called import.
• Therefore,export and import of goods and services are two major component of foreign trade which can determine the net trade balance of any country.