FACTORS

AFFECTING
COUNTRIES
TRADE PATTERNS
1. COSTS AND
PRICES
- If a country can
produce something at
 a lower cost, they
export more.
2. NATURAL
RESOURCES
- Countries with
abundant natural
resources often export
it to other countries,
while those lacking
 resources may import
them.
3. TECHNOLOGY
AND INNOVATION
- Advance technology
can make production
more efficient and
cheaper, giving
countries an edge in
 certain industries and
trade.
4. CONSUMER
PREFERENCES
- Different countries
have different taste
and preferences,
leading to trade in
goods and services
 that cater to those
preferences.

5. POPULATION AND
MARKET SIZE
- Larger countries often
have more internal
demand, but smaller
countries may
 specialize in niche
products for export.

6. EDUCATION AND
SKILLS
- A well-educated
workforce can be
more productive,
leading to more
exports of goods and
 services that require
skilled labor.
7. CULTURAL
CONNECTIONS
- Sometimes countries
trade more with others
that share similar
cultures and
languages, making it
easier to do business
together.
INTERNATIONAL
FACTOR
MOBILITY
- Movement of factors
of production such as
labor and capital,
across national
borders.
- Plays a significant
role in shaping global
economic outcomes,
including trade
patterns, investment
 flows and economic
development.
1. LABOR MOBILITY
- Involves workers
moving between
 countries in search of
employment.
2. CAPITAL
MOBILITY
- Movement of
financial resources,
such as funds across
national borders.
3. TECHNOLOGY
TRANSFER
- Facilitates transfer of
technology and
knowledge.
4. ECONOMIC
INTEGRATION
- Make agreements
such as free trade and
custom unions.
 RELATIONSHIP
BETWEEN
INTERNATIONAL
TRADE AND
INTERNATIONAL
FACTOR
MOBILITIY
- Both influence each
other.
1. COMPLEMENTAR
Y EFFECTS
- Reinforce each other’s
benefits. Increase
trade stimulates the
movement of factors
 of production and vice
versa.
2. SPECIALIZATION
& COMPARATIVE
ADVANTAGE
- Both allow countries
to specialize in the
production of goods
and services where
they have a
 comparative
advantage.
3. LABOR MARKET
- Affect labor markets
in both sending and
receiving countries.
4. INVESTMENT AND
TRADE FLOWS
- Both closely linked
through investment
flows.
* Understanding and
managing this relationship
is essential for promoting
economic development,
fostering global
cooperation and
addressing challenges
 such as inequality and
environment sustainability
*