Q.31. Define the following terms?
INTERNATIONAL
TRADE
International trade refers to that
trade that take place between a country and a number of countries of the world.
In other words we can say that all the trading activities that take place
across the national boundaries is called International or Foreign trade. It is
effect is called balance of payments.
INTERNAL TRADE
Internal or Domestic or
inter-regional trade is the trade between different regions in the same
country. We can also say that all the trading activities that take place within
a country is called Internal trade.
ABSOLUTE
ADVANTAGE
A country due to its most favourable
geographical conditions may have an advantage in the production of a particular
commodity over other countries. This advantage is known as absolute advantage
for that country over rest of the world. The absolute advantage results in a
regular inflow and outflow of goods which gives rise to International Trade.
COMPARATIVE
ADVANTAGE
When a country has an advantage of
production and move than one commodity it prefers to produce only one commodity
that is more advantageous for other. This advantage is calculated by comparing
the different commodities that how much they paying commodity is selected and
the country goes for specializing. This is known as comparative advantage.
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