CHAPTER five

CHAPTER five - CHAPTER FIVE: INTERNATIONAL TRADE THEORIES...

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CHAPTER FIVE: INTERNATIONAL TRADE THEORIES In this chapter the book, videos and workbook all explore theories of international trade . Such theories examine why different nations and firms within nations exchange goods and services for fees internationally. We begin with a review of the oldest theory, mercantilism , in which colonial powers such as England and France sought to get rich by promoting exports and limiting imports. In essence, these European governments intervened heavily in trade to fill their coffers. Trade was viewed as a zero-sum game; in other words, no one could benefit without someone suffering a loss. Later theories built upon earlier theories adding explanatory power. The theory of comparative advantage started to move thinking towards the idea that trade was not a zero but a positive sum game; by trading with one another, countries could expect to have more goods and services than if they worked alone, or worked as purely mercantilist economies. Some countries were better than others at particular things; they offered a comparatively better deal on whatever they were good at.
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This note was uploaded on 09/08/2011 for the course IBUS 330 taught by Professor Nicholson during the Spring '07 term at S.F. State.

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CHAPTER five - CHAPTER FIVE: INTERNATIONAL TRADE THEORIES...

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