Countries all around the world trade, but what is a good trade? In Week 4 about supply and demand a Crash Course video explained how when countries have a comparative advantage it is better and cheaper to trade. An example they used was for every 2 tons of shoes America can make one plane, but for every 6 tons of shoes China can make one plane. So America has a comparative advantage over planes where China has a comparative advantage over shoes. So if America traded China one plane for 4 tons of shoes, it would be cheaper and better for both of the countries. By using comparative advantages and figuring out what items a country needs and has available to trade they are able to make smart trades.
What should countries trade? In the Country Statistics from the CIA Fact Book some good trades would be if country A traded country C chemicals for machinery. Country A could also trade country B petroleum for scrap metal. Country A could trade country C machinery for electrical machinery. Country B could trade country C livestock and hides for transportation equipment. In order to make a good trade you want to be in a win-win situation. All countries need resources and if they were to supply …show more content…
Weather they are trading goods or services, trades can help countries by saving money, growing trade relationships, and helping them grow economically. Trade is important, whatever you trade, a country will never grow without the help and resources from the