Trading Among Nations Domestic business is the making, buying, and selling of goods and services within a country. International business refers to business activities needed for creating, shipping, and selling goods and services across national borders. The U.S has many natural resources, a skilled labor force, and modern production facilities. The U.S trades with over 180 countries. When a country can produce a good or service a good or service at a lower cost than other countries is an absolute advantage. A country must decide how to maximize its economic wealth if it has an absolute advantage mover more than 1 area. Comparative advantage when a country specializes in the production of a good or service at which it is relatively more efficient. Imports account for the total of bananas, cocoa, tea, silk, spices, coffee, and crude rubber in the U.S. It also accounts for 20-50% of the supply of carpets, sugar, leather gloves, dishes, and sewing machines. Without foreign trade, many things would cost more or would not be available.
Measuring Trade Relations
People work to earn money to buy things. Nations are concerned about balancing income with expenditures. When a country as a unfavorable amount of balance of trade it owes to others. The amount a country owes to other country is foreign debt. If a country exports more than it buys then there is a trade surplus. If a country imports more tan it exports, then it is a trade surplus. A country tries to keep its international trade in balance. Investment and tourism are other forms of exchange that takes place among nations. Money goes from one country to another through investment and tourism. one government might give financial aid to another nation. Banks deposit funds in Foreign banks. Some countries limit the amount of money their citizens can take out of the country when they