Chapter 10 - Chapter 10 International Trade and Economic...

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Chapter 10: International Trade and Economic Growth Economic growth is the rise in gross domestic product (GDP). GDP/ population= GDP per capital which is a good measure of standard of living. For standard of living to go up, it’s important that GDP grows higher than population. Economic growth is important for economic development which is defined as an achievement by the average citizen of a country compared to that enjoyed by the average citizen of an advanced country. It is measured by indicators like high consumption, broad based educational achievement, adequate housing, and access to high quality of healthcare. These characteristics of economic development come only after sustained years of high economic growth. International trade can affect the level of economic growth. It can increase employment through exports, the purchases of capital through exports proceeds, and exposes an economy to advances in technologies which increase productivity. However, the type of technology and which sectors it impacts can have varying degrees on imports and trade. A technology advance that promotes the import-substitution sector may reduce the volume of trade. Thus economic growth and international trade are closely linked. Trade and Development Developing countries have many negative characteristics compared to developed countries including: -low per capita income -low consumption -high illiteracy rate - inadequate healthcare
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- Concentration of exports in few primary products (e.g., agricultural goods, oil etc)
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