Economics: International Trade

In Economics ,International Trade can be defined as trade between nations.There are certain problems that face international trade. Such problems include differences of currency, linguistic barriers, and artificial barriers like cutom duties and tarrifs.
The principles of International Trade.The business of international trade is guided by the law of comparative advantage.The law of comparative advantage states that countries should specalize in the production of commodities in which they have comparative advantage over others. The theory of comparative cost is merely an extension of the principle of comparativwe advantage.This theory was propounded by Richardo in the nineteenth century.
The Merits of International Trade include:
1.It leads to increase in world output of commodities. 2. It leads to increase in standard of living all over the world. 3. It brings about the prospect for world peace. 4. It increases the number and variety of goods. 5. It tends to increase specialization. 6. It brings about exchange of ideas. And it brings about efficient allocation of resources.