Economics XII Content
Role of international trade
Role of international trade:
Every country can take more benefit specializing in the production of goods which can be produced using local resources, technology and human resource. International specialization leads to proper allocation of world’s resources and leads to production of goods under very favorable conditions.
- Consumer satisfaction and benefits:
Consumers of a country can enjoy the consumption of goods and services produced in foreign markets, which may be cheaper than the national products and which may not be produced in their own country.
- Relief and help in economic crisis:
In times of inflation, disasters, scarcity, famine, depression, a country can solve the problems through imports too.
- Qualitative production:
There arises completion among the local and foreign markets. It helps in production of qualitative products.
- Agricultural and industrial development:
Countries which lack of raw materials and other products can easily acquire them through imports. This helps in industrial development. Agriculture sector also can be developed through import of fertilizers, pesticides and improved seeds.
International trade helps the country to create employment opportunities. There in increase in production and so there is requirement of increment in labor in field of insurance, trade, industry, transportation and so on.
- Exchange of culture:
Cultural exchange takes place between countries development when they enter into mutual trading.
It enhances the domestic competitiveness and also takes advantage of international trade technology. It helps in Increase sales and profits and Extend sales potential of the existing products. It maintains cost competitiveness in your domestic market and enhances potential for expansion of your business. It helps in gaining a global market share and reduction dependence on existing markets. It also stabilizes seasonal market fluctuations.