Investments in the business growth will act as the catalyst to spur growth and will encourage expenditures among producers as well as consumers. Opening up of trade will provide wider product choices in front of the consumers causing demand for goods to take the steep rising curve. The producers and the consumers will accrue the benefits. The country can gain comparative advantage by specializing in one product and mitigate the losses. The competitive exchange rates regime will ensure the consumers of the country to afford the imported goods and sustained flow of investment will pave the path for future success. Two or more countries involve in trade as there is lack of resources n one country. There are many advantages as well as limits that are concerning trade. Benefits are accrued to each country but there are additional limits that need to be managed by international trade. One of the advantages of international trade is that it opens up choices for each country. A country can impose barriers to trade or can engage itself in free trade. Again a limitation that can be accounted for international trade is the time a country decides to lay down tariff or quota on another country. It may be the case that the decision is not good enough and the country that took the decision has to accept it without any choice. The generation of imports will influence the economy under consideration. It may influence the tax base. No economy is engage in trade causing deficits in the budget. The country
Still if the government plans to impose tariffs over the imported goods, the result would be that other countries will do the same. End result would be increased unemployment in the export competing industries and decreased unemployment in import competing industries.
According to Miller (2003), the study of this particular phenomenon concerning the Anti-Sweatshop Movement of the 1990s, rendered the then economists with the opportunity to obtain an apparent understanding of the working conditions and its potential impacts on the economic development processes.
The country of Germany commands for a relatively large share of mechanical machineries production among the European Union. The production of this type of goods is mainly concentrated in North-Rhine-Westphalia. The production of large machineries and heavy industries is concentrated in this part of the world.
The International Trade Simulation was a good learning experience that taught me a lot about how the world of international trade works. In the simulation I served the role of the trade government representative of the country of Rodamia. Rodamia is surrounded by three neighboring nations: Uthania, Alfazia, and Suntize..
Mercantilism was popular during the 16th to 18th century where exports were encouraged. Nations tried exporting more goods and importing less so as to increase the nation’s wealth. Also, a nation’s wealth was reflected by the presence of more precious metals like gold and silver.
The major weakness of a country with weak intellectual protection is that other powerful nations can convert the ideas from other weaker nations as their and then they can modify them to come up with quality and valuable products that would later be sold to the originators of the ideas at better deal prices.
The world’s economy is persistently taking a more global shape and this paper takes a close look at the issues regarding the international trade (Fernald and Greenfield, 2001). A well researched attempt has been made to evaluate the term
Some key facts about Turkish Gold Production are:
The journey of Turkish Gold Industry has seen many ups and downs. It saw its first upsurge in demand when liberalization of gold imports took place in Turkey in 1980.
It produces around 2.4% of gold of world’s total gold production. In Latin America, Argentina is the third largest gold producer after Peru and Brazil (Gold Facts 2012). This boom in Argentina’s
3 pages (750 words)Assignment
can take the initiative to impose tariff barriers with the aim to protect the domestic producers. Absolute and comparative advantage Absolute and comparative advantage is two important terms in international trade. The concept of absolute advantage states the country of Rodamia can produce more goods using the same resources as that of another country. The country will gain by specializing in that good that has comparative advantage from the other countries (Maneschi, 1998). The country must produce and export that good where the opportunity cost is lower compared to the other countries. Such strategies will allow Rodamia and the trading partner to generate best economic welfare. The effects from trade can be determined by comparing the domestic price without trade with the prices prevailing in the global market. If the domestic price is low the country has the comparative advantage to become the exporter whereas high domestic price implies the opportunity for the country to become importer (Peng, 2010). The concept of comparative advantage has its role in the total production costs of the good or service. Influences affecting foreign exchange rates The exchange rate can affect the international trade. The exchange rate can be defined as the country’s price with respect to that of another country. The exchange rate is determined by the supply and demand forces within an economy. The conditions in the international market also determine the regime of exchange rates. The interest rates can also affect the exchange rate through a chain reaction. The chain starts from the rise in the rates of interest which will lead to higher return on the bonds as well as for other securities of the government. The chain also contributes in attracting financial capital from other nations. If the exchange rate of one country is lower than that of the other country then the consumers of that country will suffer from the incapability of purchasing the imported good. As a result the
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“International Trade Simulation Assignment Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.org/macro-microeconomics/1464150-international-trade-simulation.
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International Trade Simulation One advantage and one limitation of international trade While engaging in trade with other countries, Rodamia may have to face the issues regarding the valuation of its currency against the valuation of the currency against other countries…