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Reasons for International Trade
Foreign trade, the exchange of goods between nations, takes place for many reasons. Every nation wants the opportunity to export its goods and services to other countries. A foreign outlet for sales enables a manufacturer or distributor to increase the volume of his business activity, thus increasing his chance to make a profit and increasing employment opportunities. Every nation also wants the opportunity and privilege of buying from foreign countries products and services that are scarce or unavailable at home that would be useful and beneficial to its people.
Trading with other countries is not the same as trading within one’s own country. At home a company or a bank is familiar with its own people, laws, and business practices. At abroad the picture becomes a complex one. Each country is different and therefore is said to carry different risks. Political risks, for example, relate to such vari
A. it can earn more money by expanding its production.
B. the employment rate of the country will decrease.
C. the country has to find an outlet for going abroad.
D. it can buy from foreign countries products and services that are scarce or unavailable at home.
