International Trade Theories Assignment Example | Topics and Well Written Essays - 750 words

International Trade Theories - Assignment Example Therefore, in order to have a positive balance of trade the nations tried exporting to other countries and restricting imports as it negatively affected their balances and hence their wealth. According to the mercantilism theory, there was a fixed amount of money present in the world and in order for one country to have more money; it had to export to other. So, mercantilism refers to the concept of exporting more and importing less (â€Å"Classical Theories of International Trade†, n.d.). Absolute Advantage Toward the end of the century, economic growth was being hindered by mercantilist policies. Adam Smith in his book, The Wealth of Nations (1776) presented a response to mercantilism where he claimed that these policies granted the producers an advantage at the cost of a disadvantage to the consumers. Adam Smith’s theory did not regard imports as bad but rather mentioned imports as good because other countries may be making a particular good that is more appealing to the consumers therefore trade, imports as well as export, would be profitable and lead to better satisfaction for the consumers. This meant that countries that had an â€Å"absolute advantage† in producing a particular good would produce that good and export it while it would import a good that another nation has an â€Å"absolute advantage† in (Theory of International Trade, n.d.). ... The principle of comparative advantage has been described as that occurring as a result of specialization and the division of labor (Maneschi, 1998). According to the theory, due to technological or other factors some countries specialize in producing a particular good at a lower cost. This implies that such countries have a â€Å"comparative advantage† in producing a particular good and should therefore export these goods to other countries. The same country should only import those goods in which it does not specialize that is has a comparative disadvantage in due to the higher relative costs. However, the theory also assumes that countries try to maximize their production and consumption which is not true in the real world at times. Balance of Trade Balance of trade refers to a country’s payments and receipts which results from the transactions of its residents. In ideal conditions, the balance of the receipts and payments should be equal, which is the condition of a balanced trade. However, trade is not always balanced. The trade balance in some cases can even be a trade surplus and trade deficit. Trade surplus occurs when a country’s exports exceed their imports. Trade deficit occurs when a country’s imports are greater than its exports. Trade deficits are not necessarily bad as it depends upon the life cycle and the economy and therefore may assist the economy during expansion. However, during a recession, trade deficits may prove to be detrimental for the economy. Influence of Government Governments play a pivotal role in encouraging or restricting international trade. The policies set by the government impact trade unlike free trade where there is no government role in the economy. Governments provide barrier to trade by setting

Essay question Example | Topics and Well Written Essays - 500 words - 1

Question - Essay Example agricultural plantations (coffee, sugar, tobacco, cotton, and cocoa fields), in silver and gold mines, in the shipping and construction industries, and as house slaves. These Africans work without pay as indentured servants (euphemistically termed as apprentices for life). Certain kinds of work determine the gender of slaves sold and transported. For jobs in textile factories or in the home and large plantations (the Brazilian term for this is fazenda); for example, textile factories required more men than women slaves, while the fazenda needed more female slaves due to the large amount of spinning and weaving work; most fazendas were in northeastern parts of Brazil (van Voss et al. 96). Slaves in rural areas were treated much worse, tranforming them into beasts as conditions were very bad indeed it was considered as a living hell for slaves (Conrad 71). City slaves in Brazil were thrown into mass graves, without any individual identification. Africa became a wasteland as many men and women were forcibly taken from their families; this in turn led to a marked decline in African culture as people lost contact with their heritage and traditions. Additionally, whole tribes and societies were practically wiped out, especially those Africans living near th e coastal areas, although white traders penetrated to the interior also to capture additional black slaves. Most of the Founding Fathers acknowledged the inherent conflict between slavery and ideals of liberty and equality; however, they were also realistic in their views that America cannot survive without slave labor, especially in the large plantations of the South. It was a compromise they reached to preserve the integrity and independence of the new nation. A crucial provision for emancipation passed during the Continental Congress was abandoned and rejected to appease the Founding Fathers from the South who were slave owners. Manifest Destiny was an attempt by the American politicians to formulate a foreign