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Exchange of goods and services between different areas
Exchange of physically tangible goods Trade within the country
between countries, involving the export
and import.
Trade refers to an international Trade outside of the country
transaction which does not involve
tangible goods, but services
Primary Semi Finished Finished
Primary Semi Finished Finished
CAPITAL PROCESSED CONSUMER
CAPITAL: Capital goods are tangible assets such as buildings, machinery, and equipment
used to produce consumer goods or services.
PROCESSED: A semi finished good which require so more processing to be convereted into
final product.
CONSUMER: A complete manufactured product which do not require any furthur
processing and ready to use
RAW VALUE ADDED
Spices expense
Oil / Fry expense
Chef expense
Presentation expense
Fulfill the local needs incase of growing population
Helps in specialization of local products
Provide employment opportunities to locals
Promotes industrialization - More EPZs and Industrial
estates
Transfer of IT - New and modern technology will come in
country
Rise in GNP - Increase reserves of country
Utilize in domestic resources
Good relations with other countries
Buying goods and service from other countries
Slight increase in capital goods as
more production is taking place in
HMCT
Slight increase in import of raw
materials for processing in industries
Decrease in import of consumer
goods due to local manufacturing
Selling of goods and services from one country to another
Decrease in the export of raw
materials
Processed has shown slight decrease
as they are also to industrialization
Increase in value added / finished
products
Food (food, wheat, oil, Carpets / Rugs
sugar, pulses)
Surgical instrument
Machinery (textile,
electrical, construction, Sports goods
mining, agriculture)
Ready made garments
Petroleum, textile, fertilizer
and other chemicals,
metals (iron steel)
Exchange of goods and services between different areas
Difference between the value of a Difference between the value of a
country's exports and imports of country's exports and imports of
“goods” for a given period. “goods + Services” for a given period.
Value of Export (Goods) - Value of Import Value of Export (Goods + Services) -
(Goods) Value of Import (Goods + Services)
Buy Import
Sell Export
Money earn Foriegn exchnage earn
Money lost Foriegn exchnage lost
Bank account Reserves
Measures to findout the growth in country
Gross Domestic Product Gross National Product
The total monetary value of all goods and services The total monetary value of all goods and services
produced within country over a particular time period. produced by the resources owned by the citizen of country
within or outside the country.
The system by which one currency is converted into another
Population increased and shortage of resources
Fulfill local needs , import needed
Shortage of raw materials also result in import
Poor quality of local producst result in more imports
Increased standard of living leads to more imports
Taking loans to meet deficiency
Rely on foreign assistance,
Embargo may be imposed in case of non-payment,
Assets of company may be sold to pay loans,
Higher taxations,
Inflation will be high
Business and commercial activity slows down.
Shift to value added goods,
Develop more cottage industries,
Reduce taxes,
Establish EPZs and industrial estates,
Political stability,
Encourage foreign investors,
Quality check measures,
Ban child labors
Encourage entrepreneurs.
Trading blocs are simply groups of countries that establish rules for trade
between all participating countries.
Help smaller countries Economic isolation
Promote competition Trade restrictions
widen market Fewer choices
Increase economic growth Decline in world trade
Trade barrier exists when government impose a set of restrictions that make
it difficult for countries to trade their goods and services easily.
Taxes on imports Ban on imported Restriction on
products quantity of imports
Self sufficiency rises, Limited consumer choice,
Protect local industries, Non international competition,
Create employment, Costly goods also needed to be produced
Improve BOP as not allowed in imports.
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