International Business
COMPILED
International Business
BY: VISHAL KADAM
Q) What is International Business? What are its importance?
Q) Distinguish between International & Domestic Trade?
Distinction between internal and international trade
Distinction between internal and international trade in general involves transaction for mutual benefit For this reason both the trading parties will have equal interest.
Trade is a case of geographic specific area. An area specialises in an activity and trade takes place.
Trade needs optimising activity. Profits are measured by minimising cost and increasing volume of trade. International trade has certain distinguishing factors as compared with ordinary trade.
1. International trade is the trade between two countries which are geographically and politically different. This gives rise to a conflict of interests in terms of benefit.
2.
International trade has more restriction than internal trade. The world has transformed from free trade to protection.
3. Under protection a country prevents trade to safeguard the interest of domestic industry. 4. The factors of production are perfectly mobile within a country and immobile within countries. This feature helps in retaining cost advantage in production. Different countries have different currencies. With this the problems of equating value and conversion of currencies arises. International liquidity is a major problem. Yet there is no mechanism to facilitate international payments. In 1930 IMF floated specialised instruments called Special Drawing Rights (SDR) as a common medium for international transaction. Due to disparities in economic development, SDR failed to provide adequate international liquidity.
Presently the world is divided into trading blocks and associations. The international trade is highly segmented international trade leads specialised institutions for promoting international co-operation, trade international payments and development assistance. Q)
International Business
BY: VISHAL KADAM
Q) What is International Business? What are its importance?
Q) Distinguish between International & Domestic Trade?
Distinction between internal and international trade
Distinction between internal and international trade in general involves transaction for mutual benefit For this reason both the trading parties will have equal interest.
Trade is a case of geographic specific area. An area specialises in an activity and trade takes place.
Trade needs optimising activity. Profits are measured by minimising cost and increasing volume of trade. International trade has certain distinguishing factors as compared with ordinary trade.
1. International trade is the trade between two countries which are geographically and politically different. This gives rise to a conflict of interests in terms of benefit.
2.
International trade has more restriction than internal trade. The world has transformed from free trade to protection.
3. Under protection a country prevents trade to safeguard the interest of domestic industry. 4. The factors of production are perfectly mobile within a country and immobile within countries. This feature helps in retaining cost advantage in production. Different countries have different currencies. With this the problems of equating value and conversion of currencies arises. International liquidity is a major problem. Yet there is no mechanism to facilitate international payments. In 1930 IMF floated specialised instruments called Special Drawing Rights (SDR) as a common medium for international transaction. Due to disparities in economic development, SDR failed to provide adequate international liquidity.
Presently the world is divided into trading blocks and associations. The international trade is highly segmented international trade leads specialised institutions for promoting international co-operation, trade international payments and development assistance. Q)