Advantages Of International Trade

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Introduction International trade is the interchange of goods and services between many territories. The international trade is a major part of the economy of the many nations based upon the trade and these nations are known’s as the developed nations and developing nations. In economics, we ascribe International trade to the comparative advantage. Mankiw states that all nations can get the advantage from the trading from one another as trade permits every country to specialize in doing what is does best. This way the nations have an advantage over the others in the process of the particular good or services which another nation might not able to produce at given cost or quality needed. This place the competitive advantage in the hands of the former and permits to purchase goods and services from the nations which are better competent in producing that good and services ,and permits for the…show more content…
This puts more income in the hands of the household as they can utilize their disposable incomes in buying cheaper goods and services. For example, the China nation as a whole benefit as well as its resources can be used in producing goods and services which have a comparative advantage in producing and add a larger contribution to gross domestic product. China exporting to the Pakistan get the advantage of increasing their price in – line with the world costs, would ideally be more than the domestic costs if the exporting country has a competitive advantage in producing the commodity to be exported. This puts much money into their pockets, hence increasing their profitability and offering to the GDP and the tax revenues. International trade gives consumers with a larger variety of options to select from the same or similar product types as the import from other nations may be different in the functionality and aesthetics from the domestic

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