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How does foreign trade integrates the markets of different countries ? Explain with examples. |
| Answer» Following points show that the opening up offoreign trade has integrated the markets across the countries.1. Main channel for connecting countries :-Since time immemorial foreign trade has been the main channel connectingcountries and markets.2. Expansion of Local Markets :- To put itsimply, foreign trade creates an opportunity for the producers to reach beyondthe domestic markets , i.e., markets of their own countries. Producers can selltheir produce not only in markets located within the country but can alsocompete in markets located in othercountries of the world.3. Better choice for the buyers :- With theexpansion of trade the choice of goods in market rises. Consumers get morevariety and quality goods at cheaper rates. Similarly, for the buyers, importof goods produced in another country is one way of expanding the choice of goodsbeyond what is domestically produced. In general, with the opening of thetrade, good travel from one market to another. Choice of goods in the marketsincreases.4. Impact on prizes :- With the expansionof market , prices of similar goods in the two markets tend to be equal.5. Competition :- Trade promotes thecompetition both within as well as outside the nation. Producers of differentcountries now closely compete against each other even though they are separatedby thousands of miles. | |