KEY TERMS AND CONCEPTS OF INTERNATIONAL TRADE

International trade which constitutes one of the two main parts of international economics has its own key words and concepts. Although they are mostly well-known, it’d be useful to give their precise meanings so as to provide conformity and consistency throughout the chapters. (1) Volume of trade: Defining the key terms and concepts has to start with the term volume of trade. Volume of trade gives the total amount of imports and exports. Imports are the goods or services that are bought from a foreign country while exports refer to the goods or services that are sold to a foreign country. Thus, balance of trade gives the difference between total imports and total exports. If total imports are more than the total exports within an economy, then there is a trade deficit. On the other hand, when total exports exceed total imports, it means that there is a trade surplus.