RSM100Y1 Chapter Notes - Chapter 4: Russian Ruble, International Trade, Exchange Rate
14 Mar 2016
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Exports are domestically produced goods and services sold in other countries. Imports are foreign goods and services purchased by domestic customers. Trading with other countries increases economic growth in two ways: By providing a new market for products. Companies can expand their markets, seek growth opportunities in other nations, and make their production and distribution systems more efficient. They can also reduce their dependence on the economies of their home nations. Business decision to operate abroad depend on the basic factors of production in the other country: the availability, price, and quality of labour, natural resources, capital, and entrepreneurship. Trading with other countries also allows a company to spread risk because different nations may be at different stages of the business cycle or in different phases of development. If demand falls in one country, the company may find strong demand in other nations.
