StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Macroeconomics - international trade - Term Paper Example

Cite this document
Summary
Many factors such as the exchange rate are important for countries involved in trade. There are many benefits for countries engaged in international trade…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER95.4% of users find it useful
Macroeconomics - international trade
Read Text Preview

Extract of sample "Macroeconomics - international trade"

Download file to see previous pages

The paper will then talk about some protectionism and why should be some government interference in trade. I then talk about how the terms of trade (TOT) of a country are affected by the price of exports and imports and finally the paper ends with an explanation on the impact of exchange rates on a country’s trade in the international arena. International trade refers to the exchange of goods and services that occurs across international boundaries that is between two or more countries (Grant 452).

Countries that are involved in international trade are known as open economies while those that do not engage in it are called autarky or a closed economy. International trade differs from domestic or internal trade that takes place within the country. Restrictions are usually imposed by regulating authorities, international organizations and governments on the imports (foreign goods coming into a country) and exports (local goods supplied abroad). Communication can also be a problem in international trade however due to the advancements in technology and as a result of globalization this problem has been solved to a great extent.

There are also high transport costs involved as products often need to be transported from one part of the world to another. In order to buy a foreign good one must have the foreign country’s currency to buy that good. Although these assumptions are unrealistic however they need to be made in order to understand the two concepts more clearly. A country has an absolute advantage in production of a product when the country can produce more of the product than the other country by using the same amount of resources.

In other words producing the same amount if the product by using lesser resources. Let us illustrate this through an example. Suppose that there are only two countries, A and B, in the world producing only two goods, cloth and wheat. They produce per unit of

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Macroeconomics - international trade Term Paper”, n.d.)
Macroeconomics - international trade Term Paper. Retrieved from https://studentshare.org/miscellaneous/1584155-macroeconomics-international-trade
(Macroeconomics - International Trade Term Paper)
Macroeconomics - International Trade Term Paper. https://studentshare.org/miscellaneous/1584155-macroeconomics-international-trade.
“Macroeconomics - International Trade Term Paper”, n.d. https://studentshare.org/miscellaneous/1584155-macroeconomics-international-trade.
  • Cited: 0 times

CHECK THESE SAMPLES OF Macroeconomics - international trade

Analytical Research Paper: Monopoly and the Society

In the wake of international trade, there is immense global competition in the provision of goods and services.... In the wake of international trade, there is immense global competition in the provision of goods and services.... There are two main branches of economics which are microeconomics and macroeconomics....
4 Pages (1000 words) Essay

The economy in California

For a proper and more insightful analysis of these factors, the concepts of micro and macroeconomics are introduced to deal with varying perspectives of the way in which various dynamics impact on the economy.... On the other hand, macroeconomics lays emphasis on factors that an economic entity has little or no control over, especially factors that have a national, transnational or global scope....
5 Pages (1250 words) Essay

Excel Spreadsheet on Italian Government

Name: Course: Instructor: Institution: Date; Title: macroeconomics In the recent times, it is necessary to motivate a study of the statistical correlation between the correlation relationship between government consumption and the GDP and between government stock yield and the current GDP.... hellip; Since the times of Friedman and Schwartz, this stylist fact has been considered among the vital in macroeconomics and in making macroeconomics policies (Miles and Andrew, 89)....
8 Pages (2000 words) Term Paper

Mechanisms That Would Bring about Macroeconomic Equilibrium

The kind of laws; trade and otherwise implemented domestically and internationally also affects the exchange rates systems.... In the essay “Mechanisms That Would Bring about Macroeconomic Equilibrium” the author focuses on the situation where there is no tendency for change....
2 Pages (500 words) Essay

International Trade in Africa

Africa has been open to international trade is a common policy of an open economy.... international trade is one of the highly talked about macroeconomic policies of the governments in the world.... international trade is one of the most important macroeconomic decision of a country as it affects its exchange rate, the interest rate and other aspects of the economy.... Africa's trade with other countries can be traced in the first millennium AD, when “the Axumite Kingdom had a prosperous trade empire on the eastern horn, where the modern states of Ethiopia and Eritrea lie” (Wikimedia Foundation, Inc....
11 Pages (2750 words) Essay

Location of Economic Activity

Prescott: They received the Noble Prize for their research on the effects of business cycles on international trade.... In the paper “Location of Economic Activity,” the author discusses the case of Paul, who received the award for his analysis of trade activities.... His theories led to an explanation of the effects of free trade and globalization....
2 Pages (500 words) Case Study

Macroeconomics Is Concerned with Behavior and Policies

It deals with the behavior of economy as whole- consumption and investment, the trade balance, unemployment, inflation, the… al.... There is an urgent need for reassessment of macroeconomic policy and theory with a goal to provide a theoretical framework for macroeconomic policy at national and international levels.... Defined in the broadest of sense, macroeconomics is concerned with behavior and policies that affect the whole economy of a country at an aggregate level....
5 Pages (1250 words) Essay

The Importance of International Trade and Foreign Direct Investment

The paper "The Importance of international trade and Foreign Direct Investment' states that neglect of the national sector has perpetuated the difficulty of the UK in getting out of the recent recession and clearly presses the need for the UK economic policy to achieve a balance.... rom a UK perspective, the current financial crisis has reiterated the importance of international trade and foreign direct investment (FDI) to the UK economy particularly in the current global economic downturn....
10 Pages (2500 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us