Foreign Trade

Definition

Foreign trade refers to the exchange of goods and services between countries. It involves the importation and exportation of goods, allowing countries to access products that are not available domestically.

Related terms

Tariffs: Tariffs are taxes imposed on imported goods, which can affect the cost and availability of foreign trade.

Balance of Trade: The balance of trade measures the difference between a country's exports and imports. A positive balance means more exports than imports, while a negative balance means more imports than exports.

Comparative Advantage: Comparative advantage refers to a country's ability to produce a good or service at a lower opportunity cost compared to other countries. It determines which products a country is most efficient at producing for foreign trade.