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    Why Do Nations Trade

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    Asmara khizer
    Nations trade goods and services because it allows them to specialize in what they produce most efficiently and gain the benefits of comparative advantage. When nations focus on producing the goods and services they have a lower opportunity cost for and trade with other nations, it raises the standard of living for all through increased economic productivity and availability of products. If nations did not trade, their citizens would pay more for goods and have fewer options while working less efficiently.

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    Why Do Nations Trade

    Uploaded by

    Asmara khizer
    106 views10 pages
    Nations trade goods and services because it allows them to specialize in what they produce most efficiently and gain the benefits of comparative advantage. When nations focus on producing the goods and services they have a lower opportunity cost for and trade with other nations, it raises the standard of living for all through increased economic productivity and availability of products. If nations did not trade, their citizens would pay more for goods and have fewer options while working less efficiently.

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    Nations trade goods and services because it allows them to specialize in what they produce most efficiently and gain the benefits of comparative advantage. When nations focus on producing the goods and services they have a lower opportunity cost for and trade with other nations, it raises the standard of living for all through increased economic productivity and availability of products. If nations did not trade, their citizens would pay more for goods and have fewer options while working less efficiently.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    106 views10 pages

    Why Do Nations Trade

    Uploaded by

    Asmara khizer
    Nations trade goods and services because it allows them to specialize in what they produce most efficiently and gain the benefits of comparative advantage. When nations focus on producing the goods and services they have a lower opportunity cost for and trade with other nations, it raises the standard of living for all through increased economic productivity and availability of products. If nations did not trade, their citizens would pay more for goods and have fewer options while working less efficiently.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 10

    WHY DO

    NATIONS TRADE?
    THE MOVEMENT OF GOODS AND SERVICES AROUND THE GLOBE

    Coming and Going Imports and Exports Throughout the World


    • International Trade is the
    exchange of goods and services
    between nations across
    international borders.
    • It occurs when one nation has
    something that another nation
    wants.
    • Trade only occurs if the two
    nations feel they will be better
    off after the trade than they
    were before.

    Coming and Going Imports and Exports Throughout the World


    • Nations trade when the benefit
    of the exchange is greater than
    the cost.
    • Nations produce the goods and
    services they do best and trade
    for things they do not make
    well.
    • Why make something in your
    own country when you can get
    it cheaper from another
    country?

    Coming and Going Imports and Exports Throughout the World


    • Comparative advantage
    refers to an economy's ability
    to produce goods and services
    at a lower opportunity cost
    than that of trade partners.
    • Both the U.S. and Bangladesh
    can produce a shirt, but
    Bangladesh can accomplish
    the task with much lower production costs than the U.S. (wages).
    • It doesn’t make sense for the U.S. to produce shirts and should trade
    with Bangladesh for them.

    Coming and Going Imports and Exports Throughout the World


    • The concept of comparative
    advantage suggests that
    Superman should focus on
    tasks that others can't do well,
    like stopping runaway trains or
    transporting nuclear weapons
    into deep space so they can
    detonate safely.

    Coming and Going Imports and Exports Throughout the World


    • Nations trade goods and services
    • Goods are physical items of value such as cars, oil, clothing and
    agriculture
    • Services are intangible products of value such as education,
    insurance, tourism, banking, accounting, and expertise.

    Coming and Going Imports and Exports Throughout the World


    • An import is a product
    your home country
    acquires from another
    country.
    • An export is a product
    produced in your home
    country and sold to
    consumers in other
    nations.

    Coming and Going Imports and Exports Throughout the World


    • In the 19th Century, a settler on the
    Great Plains had to make his own
    shelter and clothes, grow his own
    food, find his own water and energy,
    provide his own medical care and
    education for the children, defend
    himself, and produce everything else
    for survival.
    • Every moment of one’s life was consumed by pursuing the basics
    and little time was left for enjoyment.
    • Life was extremely difficult and many families didn’t survive.

    Coming and Going Imports and Exports Throughout the World


    • Today, we specialize in a line of work that we’re good at and get paid
    for our effort.
    • The income allows us to trade for the things we don’t do well like
    growing food, making clothes, and providing health care.
    • Because we specialize and trade, we have a much higher standard
    of living and have ample time for enjoyment and recreation.

    Coming and Going Imports and Exports Throughout the World


    • We would have to pay more money for items we want.
    • There would be many items we couldn’t acquire because we would
    run out of or lack the resources to produce them.
    • Many of us would have to work at jobs we’re not suited for just to
    make sure there are enough necessities for all.

    Coming and Going Imports and Exports Throughout the World

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