PPT: Theories of International Trade | Geography for UPSC CSE PDF Download

 Page 1


Theories of International Trade
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Theories of International Trade
I n t r o d u c t i o n
International trade refers to the exchange of goods, services, and resources 
between countries. It involves transactions between residents of different nations.
Economists widely 
agree that trade 
among nations 
benefits the world by 
reducing production 
costs and improving 
living standards.
Foreign producers 
gain by making more 
sales and earning 
foreign currency, 
which can be used to 
purchase foreign 
goods.
International trade is a 
crucial aspect of 
international relations 
and a significant 
driver of growth in 
both developed and 
developing countries.
Page 3


Theories of International Trade
I n t r o d u c t i o n
International trade refers to the exchange of goods, services, and resources 
between countries. It involves transactions between residents of different nations.
Economists widely 
agree that trade 
among nations 
benefits the world by 
reducing production 
costs and improving 
living standards.
Foreign producers 
gain by making more 
sales and earning 
foreign currency, 
which can be used to 
purchase foreign 
goods.
International trade is a 
crucial aspect of 
international relations 
and a significant 
driver of growth in 
both developed and 
developing countries.
Benefits of International Trade
Economic Efficiency and 
Growth
Boosts economic efficiency 
and contributes to rising 
incomes. Allows companies 
to benefit from division of 
labor.
Efficient Resource 
Deployment
Ensures efficient use of 
productive resources, 
leading to productivity gains 
and reducing domestic 
monopolies.
Access to New Markets
Provides access to new 
markets and materials, 
allowing for competitive 
sourcing and building foreign 
exchange reserves.
Technological Advancement
Encourages automation, 
supports technological 
change, and stimulates 
innovations and R&D 
investment.
Innovative Services
Stimulates innovative 
services in banking, 
insurance, logistics, and 
consultancy sectors.
Upgrading Global Value 
Chains
Helps emerging economies 
improve quality and 
standards to move up the 
global value chain.
Page 4


Theories of International Trade
I n t r o d u c t i o n
International trade refers to the exchange of goods, services, and resources 
between countries. It involves transactions between residents of different nations.
Economists widely 
agree that trade 
among nations 
benefits the world by 
reducing production 
costs and improving 
living standards.
Foreign producers 
gain by making more 
sales and earning 
foreign currency, 
which can be used to 
purchase foreign 
goods.
International trade is a 
crucial aspect of 
international relations 
and a significant 
driver of growth in 
both developed and 
developing countries.
Benefits of International Trade
Economic Efficiency and 
Growth
Boosts economic efficiency 
and contributes to rising 
incomes. Allows companies 
to benefit from division of 
labor.
Efficient Resource 
Deployment
Ensures efficient use of 
productive resources, 
leading to productivity gains 
and reducing domestic 
monopolies.
Access to New Markets
Provides access to new 
markets and materials, 
allowing for competitive 
sourcing and building foreign 
exchange reserves.
Technological Advancement
Encourages automation, 
supports technological 
change, and stimulates 
innovations and R&D 
investment.
Innovative Services
Stimulates innovative 
services in banking, 
insurance, logistics, and 
consultancy sectors.
Upgrading Global Value 
Chains
Helps emerging economies 
improve quality and 
standards to move up the 
global value chain.
Benefits of Global Trade and 
Investment
1 Trade opens up new markets, which expands the 
productive base and enables export diversification, 
leading to new production possibilities.
2 Trade contributes to human resource development by 
facilitating fundamental and applied research, as well as 
the exchange of know-how and best practices between 
trade partners.
3 Trade strengthens bonds between nations by bringing 
citizens of different countries together in mutually 
beneficial exchanges, promoting harmony and 
cooperation among nations.
Page 5


Theories of International Trade
I n t r o d u c t i o n
International trade refers to the exchange of goods, services, and resources 
between countries. It involves transactions between residents of different nations.
Economists widely 
agree that trade 
among nations 
benefits the world by 
reducing production 
costs and improving 
living standards.
Foreign producers 
gain by making more 
sales and earning 
foreign currency, 
which can be used to 
purchase foreign 
goods.
International trade is a 
crucial aspect of 
international relations 
and a significant 
driver of growth in 
both developed and 
developing countries.
Benefits of International Trade
Economic Efficiency and 
Growth
Boosts economic efficiency 
and contributes to rising 
incomes. Allows companies 
to benefit from division of 
labor.
Efficient Resource 
Deployment
Ensures efficient use of 
productive resources, 
leading to productivity gains 
and reducing domestic 
monopolies.
Access to New Markets
Provides access to new 
markets and materials, 
allowing for competitive 
sourcing and building foreign 
exchange reserves.
Technological Advancement
Encourages automation, 
supports technological 
change, and stimulates 
innovations and R&D 
investment.
Innovative Services
Stimulates innovative 
services in banking, 
insurance, logistics, and 
consultancy sectors.
Upgrading Global Value 
Chains
Helps emerging economies 
improve quality and 
standards to move up the 
global value chain.
Benefits of Global Trade and 
Investment
1 Trade opens up new markets, which expands the 
productive base and enables export diversification, 
leading to new production possibilities.
2 Trade contributes to human resource development by 
facilitating fundamental and applied research, as well as 
the exchange of know-how and best practices between 
trade partners.
3 Trade strengthens bonds between nations by bringing 
citizens of different countries together in mutually 
beneficial exchanges, promoting harmony and 
cooperation among nations.
Criticisms of Global Trade and Investment
Benefits of trade are often unequally distributed, with 
uneven market access widening gaps between 
nations.
Developing nations may face economic exploitation by 
global corporations, disadvantaging local businesses.
Environmental degradation and resource depletion 
often accompany increased global trade.
Economic crises spread rapidly between 
interconnected economies, increasing global 
instability.
Overdependence on foreign nations can compromise 
economic autonomy and political sovereignty.
Export-focused policies may divert investments from 
domestic priorities and needs.
Policy opacity and sudden changes by trading partners 
create unpredictable risks.