The reason for international trade is that each country has different resources. In order to use those resources efficiently, country intensively produces such product that is profitable to itself.
In international trade, Free Trade should be guaranteed for benefits to both countries. Through trade, a country is able to stabilize the price level by importing goods, that are expensive within the country, from foreign country. Also, Living standards can be raised by satisfying citizens’ demand, and domestic technology can be developed through import.
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Very straightforward and easy to understand. Nice picture!
Comment by sakura16x — September 30, 2009 @ 11:12 AM |