| Today we are living in a globalized world where it is | | | | countries may have excess resources but no market |
| possible to get any product virtually from anywhere | | | | where the economy of that country depends on |
| in the world because of increased connectivity, | | | | others to buy its goods. International trade also |
| communications and willingness to trade with other | | | | allows investors from other countries to set up |
| countries. Countries want to trade with each other | | | | factories in poor countries which are cash stripped |
| because of the want of higher quality goods and | | | | and in need of employment. |
| services. Imports are those that a country seeks | | | | The economics of trade indicates that everyone is |
| from others and exports are those which are sold to | | | | better off doing trade rather than not doing trade. |
| other countries. | | | | Suppose your school has Basket Ball and Foot ball |
| It is not uncommon to wonder at how a foreign | | | | teams where you have a choice to go for one or |
| country acquires the currency of another country to | | | | two of the teams. It would obviously be beneficial to |
| buy its products. It is possible to buy the currency | | | | choose the game which you can play efficiently and |
| required in the international market of foreign | | | | concentrate on that game rather than play both of |
| exchange with its own currency based on the | | | | them without good effort. It is best to leave the |
| exchange rate. When a country produces more | | | | other game to the ones who are efficient to play |
| goods and services to export then more countries | | | | that game and it makes the school effort better off |
| are in want of its currency to buy its goods and | | | | than the previous choice of doing both yourselves. |
| therefore its currency appreciates over that of | | | | Take you and your friend as countries, your school |
| others. | | | | as the world and the games as goods to be |
| Trade is very important for the welfare of many | | | | produced then you will have gotten an idea of |
| nations because of the scarcity of resources to | | | | importance and need of international trade. |
| produce essential goods and services and also some | | | | |