Why has trade become a necessary element of each economy currently?

Trade, as it has already been presented in the title, belongs to the most crucial as well as fundamental elements of each economy. It is connected with the fact that there is no country, which would have all of diverse products that are inevitable for its development.

Pieniądze, Euro

Autor: http://sxc.hu
Źródło: http://sxc.hu
In addition, it might be possible that a country such as Russia or China might have access to wide scope of miscellaneous resources, but the difficulty is that other countries can sell them significantly less expensive. This is so-called relative advantage and is often learnt on miscellaneous economic universities. The understanding of this tendency has resulted in intensifying the exchange of goods internationally.

Despite the fact that it may be considered as a really positive tendency, as there is additional demand for our products, we should also realize that it also has its negative sides. One of the most meaningful is related to the fact that the countries have never been so dependent on each other as they are contemporarily. This implies that economical crisis in one country is considerably more influential on other country than ever in the past.

To prove this thesis let’s go back to the year 2007, which is known to be the start of the economical crisis. The reason why it has begun is related to the fact that the American banks have minimized the safety standards, which resulted in increasing demand on various bank loans. This has resulted in the fact that much money was given 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 reduction of their cost and, due to series of connotations, it has also substantially influenced the field of trade.


Autor: www.sxc.hu
Źródło: www.sxc.hu
That’s the reason why, trade is an area that is unable to be evaluated with one word. It has both positive and negative side, which implies that the governments internationally are recommended to concentrate on taking advantage of the first one and governing the economies in such way that something that happened in 2007 would never come back.