Connect Online Access for International Accounting
Connect Online Access for International Accounting
5th Edition
ISBN: 9781260248463
Author: Doupnik, Timothy
Publisher: Mcgraw-hill Higher Education (us)
bartleby

Concept explainers

Question
Book Icon
Chapter 1, Problem 1Q
To determine

Explain the importance of international trade to global economy.

Expert Solution & Answer
Check Mark

Answer to Problem 1Q

International trade refers to exchange of goods and services between different nations. With the advent of globalization, every country is dependent on one another for meeting various needs like that of capital, raw materials and labor. Such a move where nations have opened their economy to each other has impacted global economy to a great extent.

Explanation of Solution

International Trade:

Economics is all about efficient allocation and utilization of scarce resources. International trade has facilitated smooth purchase and sale of goods in different markets of the world, thereby enabling fuller utilization of resources.

Some of the advantages of having international trade are enumerated below:

  • Facilitates economic growth: International trade brings about global competitiveness that enhances the efficiency of domestic market as they can make use of latest technology and expertise.
  • Utilize profuse resources: Some countries are endowed with certain resources while there are other countries that have limited access to these resources. International trade has brought together these nations that could sell excess resources to the countries that need them, thereby making efficient use of resources.
  • Countries gain from international trade: Corporations could export those goods that are available in abundance and import scarce ones. As such; they could make much more profits as compared to selling already abundant goods in the home country.
Conclusion

Therefore, it can be said that international trade has positively influenced global economy by bridging the gap between developing and developed nations.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education