International Trade Promotes Economic Growth

EXPLAIN THE WAYS IN WHICH INTERNATIONAL TRADE PROMOTES ECONOMIC GROWTH DISCUSS THE ARGUMENTS FOR TRADE LIBERALISATION AND AUSTRALIA’S STANCE ON THIS TOPIC EXPLAIN THE PRINCIPLE OF COMPARATIVE ADVANTAGE AND ITS LIMITATIONS International trade promotes economic growth through higher levels of real income, greater consumption and higher living standards. It can expand a nation’s consumption possibilities by providing access to other countries’ production through imports. In addition, the exports of a country allow payment …

…this model of comparative advantage assumes that transport and storage costs would be zero. In the real world, transport and storage costs are an important factor influencing trade decisions because it can affect a country’s comparative advantage. Another limitation of this model is the unrealistic assumption that resources could be transferred from one industry to another without any costs. Obviously the resources used to make wheat is different to that used to make clot