International Trade

International Trade

The international trade can be considered as one of the most important process in the global market . The international economic relationships had been considered as the main reason for the general growth of the economy on the basis of the world trade . Due to the increasing strength that had been brought about by the global economic relations , an improvement in the rate of economic had been observed through the periods following the World War II (Grimwade , 2000

World trade can be attributed as the most important reason in relation

to the increase of the international output in trade . Through the course of history there had been different factors that greatly contributed to the trend in the international trade . One of the most important concepts that increase the world trade and the movement of international goods is the specialization in the production of goods which are mainly related to the process of globalization and even industrialization and the transportation of the goods (Landau , 2005

In the study conducted , there are issues in relation to the movement of goods that are discussed and served as the main goals in the study

Question 1

A . Explain the welfare effect of tariffs , quotas and subsidies . Use relevant graphs to illustrate your answer if necessary

Included in the mains concepts that are related to the international trade is in relation to the tariffs , quotas and subsidies . These concepts are considered as barriers to the process of trade that can work on a two way action . One is to be able to control the movement of the goods and products and another is to be able to achieve taxation revenues . Although this is the case , there are different effects of the said concepts

Tariff is considered as payment or tax required from traded goods once a b is crossed . Tariffs can be added to other barrier charges such as quotas and subsidies which are often charged to trade transactions These are also referred to as the non-tariff trade barriers . Quotas are considered as the quantitative limiting factor in the international trade . On the other hand , subsidies are the support given by the government (Grimwade , 2000 Sykes , n .d

When it comes to the effect that can be brought about by the said parameters in the welfare of the economy , the tariffs can be classified into the non-discriminatory and the discriminatory tariffs . In relation to the non-discriminatory tariffs , there are certain effects that can be sited . One effect is in relation to consumer surplus . This can result sue to the fact that prices of the goods can increase due to the adjustment in expenses due to the tariff . Second tendency is the increase in products that are made by foreign companies that can afford tariffs while decreasing the chance of the developing economies to be able to export products (Grimwade , 2000 Landau , 2005 Sykes , n .d

Another weight that can be attributed to the tariff that is non-discriminatory or assigned to every product that cross...