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International Trade and Finance

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documents in English
case study
4 pages
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  1. Introduction
  2. Balance of payment
  3. Current account
  4. Capital Account
  5. Exchange rate determination
  6. International Capital Flows
  7. Conclusion

International trade involves exchange of goods and services across the international borders. It allows for competition of goods and services in the market resulting to more affordable goods to the consumers. Through international trade goods and services are made available in the international markets which could not be available without it. Through international trade supply and demand are affected at a global scale leading to world economy. International trade makes goods that are not locally available to a country to be imported and traded in that country (Fischer, 2004).

Global trade increases efficiency in that it allows countries that are developed to use their resource or technology to produce more and therefore sell at a cheaper cost. International trade allows countries to take part in the world economy encouraging foreign direct investment. This increases the growth of economy because of the competition between different countries.

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