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22 November, 16:27

What factors affect a country's decision to trade goods and services with another country?

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  1. 22 November, 19:40
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    Countries are interdependent, which means they rely on each other to support their economies. They need other countries to buy their exports to have money to buy resources that are not produced in their country. Also it is so that countries can specialize in producing a good or service and know that the goods that they do not have can be imported from other countries who specialize in that good. Countries have a lot of expences (health services, military, wages etc) and taxes rarely cover all of these, so they need to borrow to offset the deficit. Also if a country wants to prosper, they need money to improve life conditions of their inhabitants. When the life conditions improve, the citizen will be able to pay the money back in a virtuous circle.
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