International Trade Theory and Practice 2022

Running head: INTERNATIONAL TRADE THEORY NAD PRACTISE
INTERNATIONAL TRADE THEORY AND PRACTISE
Name of Student:
Name of University:
Author Note:

INTERNATIONAL TRADE THEORY AND PRACTISE1
Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Conclusion.......................................................................................................................................6
Reference List..................................................................................................................................8

INTERNATIONAL TRADE THEORY AND PRACTISE2
Introduction
The growth of an economy is dependent on various economic factors relating to
international trade, commerce, market, capitalization and long run profits. The expansion of
services and services in foreign countries leads to a long run growth. Countries perform better
when they retain larger profit levels. Therefore, it is important to analyze the factors that helps a
country to generate huge amounts of profits. This is done with respect to various trade theories
that gives an effective understanding of international markets. In order to undergo international
trade, it is crucial to understand about the range of goods and services that should be traded
(Neary, 2016). It is important to analyze factors relating that helps a country to make long run
profits with respect to a specific country. The country that is chosen for analysis is New Zealand.
The aim of the paper is to analyze factors that enables long run profits for New Zealand by
understanding relevant trade theories.
Discussion
According to international trade theory, the wealth of a country is dependent on the
availability of various resources. Trade theory is related to the exchange of goods and services
across economies which is related to effective trade and development strategies. It is profitable
when the value of export exceeds the value of imports. This is because if inflow is more than
outflow, then it means that demand for the country’s good have gone down. This lowers the
profit margin as goods are being imported (Işik, Kasımatı, & Ongan, 2017). Countries must trade
those products and services in which they have a comparative advantage as per the economic
theories. This enables the country to produce goods and services at low cost by the usage of cost
effective technologies and labor incentive approaches.