REVIEWER IN THE CONTEMPORARY WORLD

Globalization- Human beings have encountered many
changes over the last century especially in their social
relationships and social structures. It is a reality. It is
changing as human society develops. It has happened
before and is still happening today.
Trade- basic economic concept involving the buying and
selling of goods and services, with compensation paid
by a buyer to a seller, or the exchange of goods or
services between parties.
Export- A product that is sold to the global market
Import- A product that is bought from the global market
Free trade- Nothing hinders or gets in the way of two
nations trading with each other.
Trade barriers- restrictions on international trade
imposed by the government. They are designed to
impose additional costs or limits on imports and/or
exports in order to protect local industries.
Embargo- blockade or political agreement that limits a
foreign country’s ability to export and import.
Tariffs- taxes that are imposed by the government on
imported goods and services.
Non-tariffs- barriers that restrict trade through
measures other than the direct imposition of tariffs.
Quotas- restrictions that limit the quantity or monetary
value of specific goods or services that can be imported
over a certain period of time.

REASONS FOR TRADE

Differences in Technology- Advantageous trade can

occur between countries if the countries differ in their
technological abilities to produce goods and services.
Technology refers to the techniques used to turn
resources (labor, capital, land) into outputs (goods and
services).

Differences in Resource Endowments- refer to the skills

and abilities of a country’s workforce, the natural
resources available within its borders (minerals,
farmland, etc.), and the sophistication of its capital
stock (machinery, infrastructure, communications
system).

Differences in Demand- Individuals in different

countries may have different preferences or demands
for various products.

Countries trade with each other when, on their own,

they do not have the resources, or capacity to satisfy
their own needs and wants.

Goods and services are likely to be imported from

abroad for several reasons:

1. Imports may be cheaper, or of better quality.

2. They may also be more easily available or

simply more appealing than locally produced
goods.

3. In many instances, no local alternatives exist,

and importing is essential.