Economics

Companies can be grouped as operating in perfect or imperfect competitive environments depending on the slope of the demand curve. Perfectly Competitive Environment In a perfectly competitive environment, firms are the price takers. That is, the firm must accept the…

[vsw id=”BYYrYlNavnU” source=”youtube” width=”611″ height=”344″ autoplay=”no”] The global trade decline in the 1940s had some negative impacts. The living standards of people fell, and unemployment became a chronic issue. Due to this, there was a need to create international organizations…

Balance of payments has a great impact on the movement of exchange rates and international trade. When a country is faced with trade deficits, it’s likely to experience a fall in its reserves and a depreciation of its currency. As…

A balance of payments is a combined account of receipts and payments to and from other nations that arise from economic activities undertaken annually. According to C.B Kindleberger, “the balance of payments of a country is a systematic record of…

Capital restrictions are the measures that governments or central banks take to control the flow of foreign money in and out of a country’s economy. Government controls include tariffs, taxes, volume capital restrictions, etc.

Trading Blocs A trading bloc is defined as a number of nations within a geographical area that guard themselves against imports and non-members. Trading blocs bring countries together and increase the conditions for imports. Regional barriers to trade, i.e., tariffs,…

  Trade Restrictions Governments restrict international trade by imposing trade policies to shield domestic producers from competition. The main types of trade restrictions are discussed below.

Ricardian and Heckscher-Ohlin models of trade generally describe countries’ differences. Further, they give important insights into patterns and determinants of trade.

A country producing goods at a lower cost than its trading partner has an absolute advantage. On the other hand, a country is said to have a comparative advantage over others in the production of a particular good if it…

The costs and benefits of trade are subjects that elicit a lot of interest in most countries. However, most economists agree that the advantages of international trade probably outweigh its disadvantages. Below are the main benefits and costs associated with…