MONEY MATTERS

International trade is concerned with the exchange of goods between one country and another. It is the movement of goods and services from one political boundary or territory to another. It is trading between sovereign nations, which is commonly called, Foreign Trade.
International Trade has several tasks to perform. First of all, the major and substantive component of international economic relations is the International Exchange of goods and services. The second important component of international trade relates to factor movements, i.e., movement of labour and capital from one sovereign country to another. It should be noted here that historically such factor movements have played a very significant role in the development of national economies. It is well known that American economy in early stages of development, depended more on the massive immigration of cheap labour from Africa and Europe and also large capital inflows from England. So also the case with Australia’s economic development.
Even in modern days, the world’s underdeveloped countries are being helped in planned economic development by massive equity and loan capital inflows from the developed countries; and also from international financial institutions, such as World Bank. Hence, the factor movement must be regarded as major component of international economy, along with international exchange of goods.

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