International Trade And Globalization

1043 Words 4 Pages
One very important aspect of international economics and what agreeably has made international trade existent is globalization. It’s the increasing connection and integration of people, organizations, countries and different cultures around the globe. We integrate through political, economical and social issues, trade and foreign investment. We’ve learnt that with globalization, no nations exist in economic isolation (Carbaugh). No country has achieved economic success without being open to the rest of the world. Even the very isolated North Korea has a growing trade and diplomatic relations with India. It’s the secluded country 's biggest trade partners and a major food aid provider (al.).
This wave of globalization has brought great economic
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Like the more advance and developed nations, that economic welfare can be achieved through trade. Trade can help with least developing countries economic growth through increased in foreign investment exports. Trade accelerates the expansion of export by allowing developing countries to access new markets in less developing, which can open up new production possibilities, and more innovation. India, a lesser developing country at the time, cut import duties from an average of 90% in 1991 to 30% in 1997. This cut gave Indian producers access to a variety of intermediate and capital goods. As a result, industrial output grew by 50% with new products accounting for 25% of the total (European …show more content…
It is essential the buying and selling of foreign currencies though transfer of electronic balances between banks and foreign exchange suppliers. The exchange rate (price of one currency relative to another) for each individual nation strongly affects economic transactions such as trade, foreign investment, tourism and migration. Consequently, The impact of globalization on exchange rate is rather imposing. We saw this happen during the era of high globalization, between 1870 and 1914. During that time, the gold standard, which is the fixation of prices of domestic currencies in terms of a specified amount of gold, was heavily adopted. It was implemented as an international rate determining the value of a country’s currency in terms of other currencies, thus exchange rates were fixed. For example, the United States fixed the price of gold at $20.67 per ounce, and Britain fixed the price at £3 17s. Therefore, the exchange rate between dollars and pounds necessarily equaled $4.867 per pound

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