Q.Explain the concept of foreign trade.

Foreign trade is the buying and selling of goods and services between different countries; it is carried on across national borders and helps countries obtain what they cannot produce efficiently themselves.

No country in the world can produce every good and service it needs, because natural resources, climate, skills and technology are unequally distributed. Foreign trade allows a country to export goods it can produce cheaply and import goods it cannot produce, or can produce only at high cost.

Foreign trade (also called international trade or external trade) has these key points:

• It is trade between different countries, crossing national boundaries.
• It involves the use of different currencies, so foreign exchange is needed.
• It is subject to government regulations such as tariffs, quotas and trade policies. …