MGCR 382 Study Guide - Final Guide: Voluntary Export Restraints, Nominal Interest Rate, Absolute Advantage
23 Apr 2015
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Document Summary
Mgcr 382: international business - lecture 1: trade theory. Definitions: trade voluntary exchange of goods/services. As it is a voluntary act, trade only occurs when both parties that are involved in trade have something to gain from one and another. International trade- trade that happens between residents of two countries: export is the sale of goods to a foreign resident. Import is the purchase of goods from a foreign resident. Trade is voluntary; so there needs to be a gain from trade that induces people to engage in voluntary exchange. Absolute advantage or competitive advantage are two types of tools that are used to understand if trade between countries is feasible or not. Some countries are just better at producing a certain commodity then another. Therefore it may be good for the country to specialize in that certain product. In france- it takes 1/2 hours to produce one bottle of wine, and 1/3 hours to produce 1 radio.
