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Can We Do Comparison Between Domestic And International Trade?

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Anonymous Profile
Anonymous answered
Reasons why you think that Nigerian should engage in trade with Ghana
Tariq Habib Profile
Tariq Habib answered
How does the analysis of international trade differ from that of domestic markets? There are three differences:
1. The major advantage of international trade is that it expands trading horizons. If people were forced to consume only what they produced at home, the world would be poorer on both the material and the spiritual planes. Candidates could drink no wine, Americans could eat no bananas, and most of the world would be without jazz and Hollywood movies.

2. Trading across frontiers involves people and firms living and firms living in different nations. Each nation is a sovereign entity, which regulates the flow of people, goods, and finance crossing its borders. This contrasts with domestic trade, where there is a single currency, trade and money flow freely within the borders, and people can migrate easily to seek new opportunities.

3. Most nations have their own currencies. I want to pay for a Japanese car in dollar, while Toyota wants to be paid in Japanese yen. The international financial system must ensure a smooth flow of dollars, yen, and other currencies, or else risk a breakdown in trade.

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