International Trade

Running head: International Trade 0
Global Business in
The Asian Country
6/6/2019

International Trade 1
Contents
1) Understand why nations trade with each other........................................................................2
2) Summarize the different theories explaining trade flows between nations..............................3
References........................................................................................................................................4

International Trade 2
1) Understand why nations trade with each other.
The trading among nations is a very common aspect as the nation’s trade when they do
not have enough resources or by their own. If the nations do not have as much ability to
fulfill the ends of the country then it adopted the international trade theory. Trade among
nations can improve the business market of the countries and make them financially
stable. Trade defines the exchange of commodities and services (Manova, 2012). This
exchange can also do among two different countries or nations. The exchange, which is
known as internal, domestic or interregional trade and it, is called as international trade.
The main reason for the nations to do international trade is that no country has its ability
to make their own commodities and services that all are needed by the people of the
specific nation. The main commodities and services of the nation come by doing the
process of international trade (Wagner, 2012). Every country has different environmental
and climatic conditions so they are not able to produce all types of resources and products
that fulfill the need of the people so international trade is must for all the countries.
Like, India can produce textiles at a lower cost, Japan can produce electronics, and
automobiles at the least cost. Therefore, international trade helps both countries in getting
the exchange of their products. The nation's trade makes the system easier and maintains
the proper supply of resources in each nation.