Trade is buying and selling goods and services. Trade occurs because people need and want things that others produce or services others perform.
People must have such necessities as food, clothing and shelter. They also want many other things that make life convenient and pleasant. They want such goods as cars, books, and television sets. They want such services as haircuts, cinemas and theatres, and bus rides. As individuals, people cannot produce all the goods and services they want. Instead, they receive money for the goods and services they produce for others. They use the money to buy the things they want but do not produce.
Trade has contributed greatly to the advance of civilization. As merchants travelled from region to region, they helped spread civilized ways of life. These traders carried the ideas and inventions of various cultures over the routes of commerce. The mixing of civilized culture was an important development in world history.
International trade is the exchange of goods and services between countries. Trade that takes place within a single country is called domestic trade. International trade is sometimes called world trade or foreign trade.
International trade permits countries to specialize in producing those things they are best suited to make with the resources they have. Countries benefit by producing the goods they can make most cheaply, and buying those goods that other countries can make more cheaply. International trade makes it possible for more goods to be produced and for more human wants to be satisfied than if each country tried to produce everything it needed within its own borders.
By the early 1990’s, world trade, as measured by exports, amounted to approximately 3,5 trillion U.S. dollars a year. The world's leading exporting nations were Germany, the United States, Japan, France, and the United Kingdom. Most world trade is carried out by private exporters and importers. Only a small part of international trade is handled by governments. In Communist countries, however, the government conducts much international trade.
World trade benefits people in two chief ways. First, consumers can obtain more goods at lower cost through specialization and exchange than if every country tried to be self-sufficient and produce everything it needed. Second, scarce resources can be used more efficiently if each nation concentrates on making those things it can produce more efficiently than other countries. The economic principle of comparative advantage states that each country should concentrate on producing those goods it can make most efficiently and buy from other countries those goods it cannot produce as efficiently.
The greatest volume of international trade takes place between the advanced industrial countries. This trading happens because many of the people in these countries earn enough money to purchase large amounts of goods, and because these countries have the most specialized industries. For example, the United States exports aircraft and computer equipment to Japan. In turn, the United States imports cars, stereo equipment, and colour televisions from Japan.
Write down as many adjectives as possible with the following noun.
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Choose the best variant.
1) Trade that takes place within a single country.
a) international trade
b) world trade
c) domestic trade
2) It is the exchange of goods and services between nations.
a) international relations
b) domestic trade
c) trade
3) It is buying and selling goods and services.
a) world trade
b) international trade
c) trade
4) This kind of trade permits countries to specialize in producing.
a) international trade
b) trade
c) domestic trade
Complete the following sentences according to the text.
1) By the early 1990’s the world's leading exporting nations were....
2) 2 The reason why trade takes place between nations is....
3) The greatest volume of international trade takes place....
4) The economic principles of comparative advantage states....
5) Foreign trade is....
6) Domestic trade is....
7) Traveling from region to region merchants helped....