WHAT IS INTERNATIONAL TRADE
International trade is when countries exchange goods and services with one another. Usually each country will use money to pay for the goods or services from the other country. Goods can be things like clothe. Food, machine parts, or even things like furniture. Services are tasks or jobs that one country does for another. For example, putting the small pieces of a doll together to make one whole doll is a service. Countries that have lots of people without higher education need to trade these kinds of service because it gives their people jobs.
When goods are moved from one country to another they have two special names. Goods coming into a country are called imports. Goods going out of a country are called exports. Sometimes a country imports more goods from another country than it exports to that country. This is called having a trade deficit.
Other times a country exports more goods to a country than it imports from that same country. This is called having a trade surplus. Today the United States has a trade deficit with Japan because United States receives more goods from the Japanese than we send to them.
WHY COUNTRIES ENGAGE IN INTERNATIONAL TRADE
A nation trades because it lacks the raw materials, climate, specialist labour, capital or technology needed to manufacture a particular good. Trade allows a greater variety of goods and services. International trade is necessary, because the scare resources are distributed unevenly between different countries and thus some countries are better producing some products than other. For example Zimbabwe has virtually all the world's chrome resources, so it has an advantage of extracting it while the workforce in Germany can produce chrome tapes (because they have the capital and technology). Without international trade the chrome tape...