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International Trading

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International trading is where countries exchange goods, services, and money without that many barriers. Just like moat everything else, international trading comes with advantages and disadvantages.

One advantage to international trading is the large variety of goods that are available. You can get different varieties of clothing, auto parts, just about anything. Another advantage is the efficient use of a country's resources. When countries manufacture goods through comparative advantage, which means they have the ability to manufacture goods using less inputs than other manufacturers, they avoid duplication which helps preserve the environment. One more advantage to international trading is that it makes production more efficient because the different countries will keep coming up with improved production methods in order to keep production costs down and to beat the competition (chapter 9, Application: International Trading).

One disadvantage of international trading is that it could cause pollution and other environmental disasters because companies do not invlude the costs of pollution control and environmental protection into the costs of their goods when they are in competition with companies in countries where the environmental laws are weaker. Another disadvantage of international trading is short-term structural unemployment. When trade barriers are removed, workers may find it hard to find employment and may require unemployment assistance until they can find a job (hsc.csu.edu). One more disadvantage of international trading is unfair competition. Many people feel that free trade is acceptable if all the countries involved play by the same rules. If every country went by different regulations it would be unfair to have businesses compete in an international marketplace (chapter 9, Application: International Trading).


International trading can allow countries to produce through comparative advantage in order to ensure a large supply og=f goods and to remain competitive. Free trade is opposed by some political parties because gains from trade may not be distributed equally between countries. As we have learned in this essay, there are advantages and disadvantages to international trading. There is no concrete answer. It is up to each individual country to decide if they want to try to improve their economy by trading goods with other countries.


Mankiw, N. G. (2007). Principles of economics (4th ed.). Mason, OH: South-Western Cengage Learning

Money: Its Functions and Characteristics




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