Answer the following questions in not more than 150 words.
How do nations gain from International Trade?
International trade is the exchange of goods and services among countries across national boundaries. Countries cannot produce themselves and for that, they need to trade. They can purchase at a lower price.
• International trade is the result of specialization in production.
• If different countries practice specialization and division of labor in the production of commodities then international trade benefits the world economy.
• Each kind of specialization can give rise to trade.
• Thus, international trade is based on the principle of comparative advantage, transferability of goods and services and in principle, should be mutually beneficial to the trading partners.