Nature and scope of international trading



Nature and scope of international trading

Benefits

  • Wider choice of goods and services
  • Creates competition
  • Specialization, comparative advantage
  • Political and social links

Drawbacks

  • Loss of output and jobs from domestic firms cannot compete effectively with imported goods
  • Switch of making goods will cause job losses and factory closure
  • Decline in domestic industries
  • Loss of foreign exchange
  • Some importers may dump goods at below cost price to eliminate competition

 






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