The previous chapter presented an introduction to international economics, the foundation of international business. This chapter will focus on international trade. The term "international trade" denotes both an area of study and a human activity. Thus, this chapter will consider international trade both from the purely theoretical viewpoint and from the practical viewpoint.
The theoretical discussion will include an explanation of the main concepts and relationships that form the basis of the discipline, as well as an outline of the reasons for and the benefits derived from trading across national boundaries. The chapter will identify some policy issues surrounding governmental attempts to regulate international trade so as to maximize the benefits and minimize the negative effects on the domestic economy.
The second part of the chapter will discuss international trade as a human activity and will outline its quantitative and qualitative aspects in order to illustrate its tremendous importance for human survival.
LEARNING OBJECTIVES
After studying the material in this chapter, the student should be familiar with the following concepts:
- The Principle of One Price
- The Principle of Concentration
- The Principle of Declining Share of Foreign Trade
- Comparative advantage and the Ricardo and Heckscher-Ohlin Theorems
- The Product Life Cycle Theory
- GATT
- Economic integration and the EEC
- Tariff and nontariff trade barriers
- The Infant Industry Argument
- Extent of international trade
- The U.S. position in international trade
- The U.S. trade deficit
- 1407 reads
