International economics theory to real world issues - Assignment Example

Issues in international trade International trade is the trade occurring between multiple countries. The exchange of products and services takes place irrespective of borders. In most global countries, international trade represents a significant proportion of their gross domestic product. International trade gives consumers and countries the chance and opportunity to acquire goods and services that are otherwise not available in their countries. Every kind of goods, product, and service are available at the International market.

The following is a proposal paper looking at the trends and the issues presently being witnessed in international trade. It looks comprehensively at the issues plaguing international trade and its promise of increasing wealth for countries. International trade and international economics International economics concerns itself with the effects on economic activity of global differences in productive resources and consumer preferences or tastes and the international institutions that affect them.

The aspect of international economics seeks to explain the patterns and results of transactions and interactions between inhabitants in different countries. The aspect of international economics includes international trade, migration, and investment. International trade being one of the key pillars of international economics is supposed to be a voluntary exchange occurring with all the participating countries expecting to gain. Free trade increases access to goods and services that may be lacking in some countries (Enderwick 222).

For this reason, in international economic, trade bridges the differences in terms of goods and services. It follows the laws and rules of supply and demand to cater for the demand of areas with low supply of certain goods and services from areas with a high supply of said products and services. International trade promotes specialization and the division of labor increasing output and consumption. As a result of international economic interdependence, economic conditions and policies in one country increasingly influence economic conditions in other countries.

In addition, international trade abides by some fundamental international economic principles such as standard exchanges. Application of material into international tradeThe comprehension of international trade is important in critically understanding its importance and how it is the backbone of today’s increasingly globalized modern, commercial world. It helps in understanding how producers in various countries try to profit and benefit from an expanded market rather than being limited to the market within a single county.

It includes understanding the various reasons that trade across international takes place. The reasons include lower production costs in one country versus the other, specialization, the lack or the surplus of natural resources and consumer preferences or tastes. International trade enables countries to concentrate on what they can produce best. Applying the various lessons learned in class in order to understand the various strategies and theories that underpin international trade. For example, one theory that explains international trade is comparative advantage.

Comparative advantage explains the ability of a country in producing products and services at a lower opportunity cost than other countries. It gives countries the chance and opportunity the ability to sell goods or services at a lower price than other countries. It ensures supply of products and services in areas where they are lacking. Works CitedEnderwick, Peter. "Policy Issues in International Trade and Investment in Services." Enderwick, Peter. Multinational Service Firms. New York: Routledge, 2012. 215-244. Print.