In today’s complex economic world, neither individuals nor nations are self-sufficient. Nations have utilized different economic resources; people have developed different skills. This is the foundation of world trade and economic activity. As a result of this trade and activity, international finance and banking have evolved.
For example, the’ United States is a major Consumer of coffee, yet it does not have the climate to grow any of its own. Consequently, the United States must import coffee from countries (such as Brazil, Colombia and Guatemala) that grow coffee efficiently. 46)On the other hand, the United States has large industrial plants capable of producing a variety of goods, such as chemicals and airplanes, which can be sold to nations that need them. If nations traded item for item, such as one automobile for 10,000 bags of coffee, foreign trade would be extremely cumbersome and restrictive. So instead of barter, which is the trade of goods
In today’s complex economic world, neither individuals nor nations are self-sufficient. Nations have utilized different economic resources; people have developed different skills. This is the foundation of world trade and economic activity. As a result of this trade and activity, international finance and banking have evolved.
For example, the’ United States is a major Consumer of coffee, yet it does not have the climate to grow any of its own. Consequently, the United States must import coffee from countries (such as Brazil, Colombia and Guatemala) that grow coffee efficiently. 46)On the other hand, the United States has large industrial plants capable of producing a variety of goods, such as chemicals and airplanes, which can be sold to nations that need them. If nations traded item for item, such as one automobile for 10,000 bags of coffee, foreign trade would be extremely cumbersome and restrictive. So instead of barter, which is the trade of goods
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