University Economics: International Trade Report and Analysis

This report provides a comprehensive analysis of international trade, exploring key economic concepts and their applications. It begins by defining international trade theory and its relation to a country's wealth, followed by an explanation of comparative advantage, highlighting its role in competitive pricing and increased sales margins. The report then delves into stabilization policies, differentiating between macroeconomic strategies by governments and central banks to maintain economic growth and manage price fluctuations, including a discussion of fiscal policy and its impact on aggregate demand through government expenditures and taxation. Furthermore, the report explores the implications of international trade, including its impact on global markets, competition, and consumer benefits. It also examines the role of international political economy in understanding global challenges and concludes by emphasizing the growing importance of international economics in an increasingly integrated global market.

Economics-International trade

TABLE OF CONTENTS
Explaining various aspects of International trade .....................................................................1
REFERENCES................................................................................................................................3

Explaining various aspects of International trade
International trade theory states that the wealth of the country is been determined by the
holding of its gold and the silver (Vernon, 2017). It is called as the field of the economics that is
applied for assessing the international trade patterns of the country across the world.
Comparative advantage refers to the economic ability of the company to produce the
goods and the services at lower cost in comparison to its competitors. Comparative advantages
offers an opportunity to the enterprise in producing and selling the product at lower price against
its competitors which in turn helps in gaining larger sales margin for an entity.
Stabilization policy is considered as the macroeconomic strategy introduced by the
government and the central bank in order to maintain the economic growth level and in
minimizing the changes in the price. Sustaining the stabilization policy needs monitoring of the
business cycles and in adjusting the bench-mark rate of interest for controlling the aggregate
demand within the economy of the country. This policy seeks for limiting any kind of the erratic
swings in the total output which is been evaluated or measured by the GDP and control surges at
the time of inflation or the deflation. Stabilization among these factors results in healthy
employment level. Fiscal policy could be used for stabilizing the economy in which the
utilization of the government expenditures and the taxes in order to influence the economic
activity level. Fiscal policy is used for closing the recessionary period or the inflationary gap.
Discretionary fiscal policy is used to shift the aggregate demand. The other type of fiscal policy
that is expansionary policy which comprises increase in the purchases of the government or the
transfer payments and decline in the taxes leads to shift in the aggregate demand curve towards
right (Jones and Kierzkowski, 2018). On the other side contractionary policy may include the
decrease in the transfer payments and the rise in the taxes results in the shift of the demand curve
towards left.
International trade refers to the exchange of the goods and the services in between the
different countries across the world. It gives the rise in the world economy where the prices,
demand and the supply are been impacted by the global events. This kind of trade allows the
company in expanding the market for its products and the services in new market globally.
International trade provides for greater competition and thus more and more competitive prices
which in turn brings the cheaper goods for the consumers. It acts as the essential era for every
organization and counted as the backbone of the modern and the commercial world. It helps an
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entity in earning larger profits by facilitating expansion and the diversification in the overall
market with larger customer base as products are availed at low cost. It plays a vital role in
enhancing the living standard of the people, providing the employment opportunities and helps
the customers in enjoying the wide variety of the goods.
International political economy is the social science which attempts for understanding the
international and the global problems or challenges by using the theoretical opinions and the
interdisciplinary tools (Neary, 2016). International economics is growing an importance due to
the rapid integration of the international market in the economy.
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REFERENCES
Books and Journals
Jones, R. W. and Kierzkowski, H., 2018. The role of services in production and international
trade: A theoretical framework. World Scientific Book Chapters. pp.233-253.
Neary, J. P., 2016. International trade in general oligopolistic equilibrium. Review of
International Economics. 24(4). pp.669-698.
Vernon, R., 2017. International investment and international trade in the product cycle.
In International Business (pp. 99-116). Routledge.
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