International Trade Basics Practice Test — Flashcards

International trade is the exchange of goods, services, and capital across international borders. It's a key part of the global economy and can have many benefits for consumers and countries. 

International trade can involve imports or exports:
Imports: Goods or services brought into a country
Exports: Goods or services sold to a foreign country 
International trade occurs when one country has a comparative advantage in producing a good or service. This means that the opportunity cost of producing that good or service is lower for that country than any other country. 
International trade can involve consumer goods, such as television sets and clothing; capital goods, such as machinery; and raw materials and food. 

International trade can have many benefits for consumers and countries, including:
Consumers: Access to goods and services that may not be available domestically, more competitive pricing, cheaper products, and larger potential customer base
Countries: Expanded markets, more efficient use of resources, increased competition, and foreign direct investment (FDI)