Difference between international trade and internal trade

For College students

1. Economics of international trade B.Com Semester-V

2. Unit –I Principles of international trade

3. Difference between internal & international trade

4. Introduction Trade means exchange of goods and services between two persons, states or countries. specialization is the mother of trade. In this world many countries famous in various types of production like Switzerland would specialize in watches, Germany in the manufacture of various types of machinery, India specialize in textile and jute production.

5. Meaning of internal trade When buying and selling of goods and services take place within the geographical boundaries of country, it is referred to as internal trade. Example:- Trade between Gujarat and Maharashtra.

6. Meaning of international trade International trade is the exchange of goods and services between countries. Example :- Trade between India and USA, Trade between Japan and Srilanka.

7. Differences in factor mobility Land, labour, capital and entrepreneur is the four factors of production.

8. Separate market A market is a separate market based on language, usage, weight, criteria, terms of sale, unit of currency, etc.

9. Differences in geographical and climate condition The geographical diversity seen in different places is a great gift given by nature.

10. Different economic policies Every country has to formulate economic policies to keep its economy afloat.

11. Sense of nationalism Each country gives first priority to its own country in all matters which we can call nationalism.

12. Different currency system Each country has developed its own currency to facilitate the exchange of its own.

13. Existence of independent sovereign states A state with a defined territory that administers its own government and is not subject to or dependent on another power.

14. Conclusion In short Internal trade is between us, while international trade is between us and them.