• Why has trade become an inevitable element of each economy at present?

    Date: 2023.04.13 | Category: Trade | Tags: ,,,,,

    Trade, as it has already been presented in the top, belongs to the most influential as well as crucial elements of each economy. It is connected with the fact that there is no country, which would have all of various goods that are necessary for its development.

    Pieniądze, Euro

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    Besides, it can be possible that a country such as Russia or China can have access to great scope of miscellaneous resources, but the problem is that other countries can sell them considerably less expensive. This is so-called relative advantage and is often learnt on miscellaneous economic universities. The understanding of this fact has resulted in intensifying the exchange of commodities globally.

    Despite the fact that it may be perceived as a very positive tendency, as there is additional demand for our commodities, we are recommended to also not forget that it also has its harmful sides. One of the most important is related to the fact that the countries have never been so dependent on each other as they are contemporarily. This implies that financial crisis in one country is significantly more influential on situation in other country than ever in the past.

    To illustrate that thesis let’s go back to the year 2007, which is thought to be the start of the financial crisis. The reason why it has begun is connected with the fact that the American banks have decreased the safety standards, which resulted in improving demand on various bank loans. This has ended up in the fact that much money was offered to people, who were unable to pay the rates, which indicated that the supply level of estates in USA has reached top level. This led to minimalization of their cost and, thanks to series of connotations, it has also considerably influenced the topic of trade.


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    As a result, trade is an area that is not possible to be evaluated with one word. It has both positive and negative side, which means that the governments worldwide should concentrate on benefitting from the first one and governing the economies in such way that something that took place in 2007 would never come back.