Questions what is the main features of the socialist economy?


The role of foreign trade



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Final exam questions and answers

The role of foreign trade.

Key words: Factors of productivity, scarce resources, economic development.

Foreign trade is the reflection of economic relationships among the individual economies and represents the part of the country foreign relationships, which include trade exchange of a part of the production. In the simplifies balance understanding, it is usually presupposed that the object of this exchange is such a part of the production, which exceeds the home consumers demand and thus is the object of export, or, vice versa, that part of the home demand which is not satisfied by the home production and thus has to be covered by import.

Factors of productivity, scarce resources, economic development In harmony with the conclusions of the classical, neo-classical as well as modern foreign trade theories, it can be stated that at present foreign trade belongs to the decisive factors influencing economic growth of both the individual countries as well as the world economy

Therefore, it is possible to correct through import of certain products the limits given both by the natural conditions (insufficient raw materials resources, limited area, soil and climatic conditions) and the economic conditions (production costs of the home production are relatively high regarding the given scope of the home market).

The possibilities of increasing exports may also reveal the underlying investment in a particular country and thus assist in its economic growth.



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