Running Head: International Trade
Abstract
In this essay we’ll discuss the relations between trade and world output, the broad pattern of international trade, countries and the international trades they rely on.
Introduction
International trade is purchase, sale, or exchange of goods and services across national borders. Trade can benefit many countries by providing them with goods and services their countries don’t have or unable to produce. International trade can also create many new jobs for people who are unemployed. Many countries depend on international trade which can be a good thing and bad thing. In this essay we’ll discuss the relations between trade and world output, the broad pattern of international trade, countries and the international trades they rely on.
The amount of world output at anytime effects the amount of international trade at that time. When world output slows down so does trade and when world output increases trade does as well. Trade slows down when there is economic recession. This is because when people become concern with their finances and its future they don’t buy as much as they usually buy, whether it’s domestic or imported products. Trade and world output also share relations because when a country is in recession its currency is weak relative to other nations. This means imports will come more expensive relative to domestic products. Trade has frequently grown faster than output.
The broad pattern of international trade. About sixty percent of the worlds merchandise trade comes from high income economies. Thirty four percent of the world trade is the two-way trade between high income countries and low and middle income countries. Only six percent of the world trade comes from the t ...