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INTERNATIONAL COMMERCE (Characteristics (Interchange of commodities,…
INTERNATIONAL COMMERCE
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Characteristics
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International trade takes place basically due to geographical specialization. Every country specialises in the production of goods and services in which it has a specific advantage. E.g: India/UK – export/import – deficit/surplus – balance of international payment
Sellers and buyers belong to different countries. They may have no chance of ever meeting one another. Therefore, they have to depend upon middlemen for transactions.
Costs difference between countries (labour, raw material, taxes…)
Importance
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When a nation has a trade surplus, it has control over the majority of its own currency (balance between deficit and surplus )
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