International Trade Essay Example | Topics and Well Written Essays - 1750 words - 1

International Trade - Essay Example When the overall prices for the raw materials decrease, larger scale manufacturing is valued and the merchandize above the local demand line is exported to generate income and get international product exposure Increased demand for foreign products any where can increase exports in that country. Also the accidental surged demand for any product globally also increases exports. For Example; increased demand for face masks when the Swine Flu spread like an epidemic disease. Sudden demand for warm or cooler clothes, technological changes and need for technologically enhanced products also shift the demand curve upward. The increased governmental spending might improve the standard of living in a country. The improved standard of living might not ensure that people will start buying expensive products but they will try to invest money and save by buying good quality products in relatively lesser currency notes Easier and supple terms of trade have also encouraged exports globally. This means that governments and organizations find it easier and cheaper to get into international trade with the neighboring countries because a loathsome burden of the terms of trade is waived off. The slack terms of trades in term of tariffs and quotas, encourage cross border trades and businesses This graph explains the impact of increased/decreased demand and supply of local product and eventually a shift in the demand for foreign products. The same happens in reality as well, when demand for local products increases, the imports (exports for foreign country) also increases in order to attain the equilibrium in the market. When this happens the magnitude of change in exports (from foreign country’s end) is almost double than that of the change in local products or imports. Considering and applying trade liberalization theories, where the perfect