Active exports empower businesses to take control of their international trade expansion. Unlike passive exporting, which involves waiting for unsolicited orders, active exporters proactively identify and target promising foreign markets. This
International economics
Where Do Comparative Advantages Come From?
Comparative advantages come from the ability to produce goods and services at low opportunity costs, which is influenced by the availability of economic resources (also called factors of production) and their quality. For example, several countries
Imports Impact: Competition, Growth, Inflation & More
Imports impact the economy in several aspects. For example, at the micro level, imports affect competition by increasing supply in the domestic market. Consequently, there is more pressure on prices and profitability in the domestic market.On the
Why Countries Import: A Look at Factors Affecting Imports
Availability is one of the fundamental factors affecting imports. We import goods from abroad because they are unavailable in the domestic market. For example, the domestic economy does not produce them because the geographical location does not
Reasons Why International Trade Exists
International trade exists for several reasons. First, differences in demand underlie trade. Certain products we want are not produced in our country but are only available in other countries, so we have to import them.Another key reason why
Benefits of International Trade
Increased access to cheaper and more varied goods and services is a key benefit of international trade. Thus, it allows us to increase well-being. We can satisfy our needs and wants by buying more varied and cheaper products not produced
Autarky Explained: Self-Sufficiency vs. Global Trade (Advantages & Disadvantages)
What's it: Autarky is a system or philosophy in which an economy seeks to be self-sufficient. If a country adopts this system, it will try to meet its needs from within. And suppose the country is not involved in international trade or capital flows.
Foreign Exchange Reserves: A Nation’s Economic Shield for Economic Stability
What's it: Foreign exchange reserves are liquid assets denominated in foreign currency held by the central bank or government for future use. This includes reserves in hard currency (such as dollars, euros, and yen), government securities
Capital Account: Beyond Current & Financial in the Balance of Payments (Components)
The capital account acts as a companion to the current account and financial account within a country's balance of payments (BoP). It meticulously tracks the flow of capital—not money used to buy goods and services but rather transactions involving
Perfect Capital Mobility: Ideal & Reality (Exchange Rates, Effects)
What's it: Perfect capital mobility describes a hypothetical scenario where capital, such as money and investments, can move freely across borders without restrictions. In this ideal world, there are no barriers to entry or exit for capital flows.
Real Exchange Rate: Understand Currency Values & Trade Impacts (Formula, Calculation, Determinants)
What's it: The real exchange rate is the price of one currency against another currency adjusted for differences in the price levels of domestic and foreign prices. The aggregate price level measure is inflation, which shows you the currency's
Financial Account: Understanding Investment Flows in the Balance of Payments (Components)
Financial accounts act as a vital compass for understanding a country's investment activity on the global stage. They're a key component of the balance of payments (BoP), meticulously tracking the flow of investments between a country and the rest of