The essential logic behind international trade is not different from that underlying trade among different states. Why, then, do we study international trade as a special subject?
There are at least three reasons.
1 . Domestic trade takes place under a single national government, whereas foreign trade always involves at least two governments.
2 . All trade within the borders of one country is carried out in their own currency, whereas trade across national borders involves at least two currencies.
3 . It is much easier for labor and capital to move about within a country than to move from one nation to another.
You might also like to view...
What is the marginal revenue from selling the third unit?
a. $50 b. $100 c. $150 d. $0
Suppose the rate of inflation over the last 5 years has been around 4-5%. Investors use an inflation expectation of that range when making investment decisions. The decision of the investors is based on the theory of _____
a. absolute advantage b. rational expectations c. adaptive expectations d. sticky wages
If there is an unanticipated decrease in aggregate demand, which of the following is most likely to occur?
a. an increase in the price level b. a reduction in employment c. an increase in the growth rate of real GDP d. an increase in consumption
Which of the following expenditures are not included in the consumption component of GDP?
What will be an ideal response?