International Trade Flashcards, test questions and answers

Discover flashcards, test exam answers, and assignments to help you learn more about International Trade and other subjects. Don’t miss the chance to use them for more effective college education. Use our database of questions and answers on International Trade and get quick solutions for your test.

What is International Trade?

International trade is the exchange of goods and services between countries. This type of trade allows for an increased variety of products to be available in each country, as well as increased competition among producers in different countries which can often lead to lower prices for consumers. International trade also provides opportunities for companies in developed countries to enter new markets and benefit from economies of scale. Additionally, international trade helps to promote economic growth, create jobs, and reduce poverty all around the world.The main instruments used when conducting international trade are tariffs, customs regulations, quotas, subsidies, export credits and other incentives such as special tax treatments or access to financing schemes. Tariffs are taxes that a government imposes on imported goods which makes them more expensive than domestic produce; this encourages people to buy local products instead. Customs regulations ensure that imports comply with safety standards while quotas limit the volume or value of certain items that can be imported into a country at any given time. Subsidies provide financial support directly to exporters while export credits allow governments or firms to guarantee credit lines extended by foreign buyers so they don’t have to take on additional risk when purchasing from abroad. Other incentives may include tax breaks for businesses importing raw materials or exclusive access rights granted only to certain exporters/importers in order help them remain competitive with their foreign rivals.