Date Posted: 12/3/2011 5:36:41 AM
Posted By: strictlyurban Membership Level: Silver Total Points: 209
INTERNATIONAL TRADETrade has always been perceived as one of the major avenues of enhancing economic growth and development within economies. International trade is the door way to surplus production and also the means of widening international markets and improvement of international division of labor and improved productivity.Neo-classical economists emphasize on trade between economies so as to foster growth, this is done through international trade which is considered to be an import stimulator. It provides worldwide economies with products and services which if not possible economies would have been constrained by their limited size of their markets. It acts as a vent of surplus production and equally widens its markets which lead to induced investments and savings this in turn enhances the enlargement of countries consumption capacities and capabilities.International trade helps countries achieve development by promoting and rewarding the sectors of the economy where individual countries posses a comparative advantage in terms of labor efficiency or factor endowments. It enables countries to take advantage of of economies of scale therefore reducing costs of production leading to supply of goods and services at low and efficient prices. It provides the basis of inflow of foreign capital and technology which is critical in accelerating economic growth; through creating employment and improving balance of payments this in turn leads to acquiring capital goods and technology which are critical in development.It also has educative effects amongst economies especially learning by doing effects, example technological knowledge and managerial talents. International trade enhances increased consumer choice within the markets since the consumer has a wider range of products and services to choose from. Through completion it enhances efficiency and product improvement through use of appropriate technology and also enables improved resource application and allocation since economies can not afford to mis-allocate because they might lose market for their products due to competition from other economies.International trade also contributes to the advancement of scientific inventions through research of product improvement as economies want to produce products that will attract consumers and will hold a greater market share thus increasing their output.
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