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Q.Explain any three reasons for international trade.

Gujarat GsebGujarat Board (GSEB) HSC Commerce Board 2022Subjective· 3mImportance★★★★★
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Reasons for international trade: uneven natural resources, cost/efficiency differences (specialisation), and need for goods, technology and markets.

International trade takes place because no country is fully self-sufficient. Three important reasons are:

  1. Unequal distribution of natural resources — natural resources, climate and minerals are not spread evenly across countries. A country imports what it does not have (e.g. crude oil) and exports its surplus resources, so trade fills these gaps.
  2. Differences in cost and efficiency of production — countries differ in labour, capital, skills and technology, so they can produce some goods more cheaply and efficiently than others. Each country specialises in such goods and exchanges them, benefiting from comparative advantage. …
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