Answer :

International trade is the exchange of goods and services among countries across national boundaries. Countries cannot produce themselves and for that, they need to trade. They can purchase at a lower price.

• International trade is the result of specialization in production.

• If different countries practice specialization and division of labor in the production of commodities then international trade benefits the world economy.

• Each kind of specialization can give rise to trade.

• Thus, international trade is based on the principle of comparative advantage, transferability of goods and services and in principle, should be mutually beneficial to the trading partners.

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