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1、Chapter1InternationalTrade1.Whatarethereasonsforinternationaltrade?Therearethreemainreasons:resourcereasons,economicreasons,andpoliticalreasons.Theresourcereasonsrefertotheunevendistributionofresourcessuchasnaturalresources,capital,andlabor.Theeconomicreasonsareexplainedbytheprincipalofabsolutead
2、vantageandtheprincipalofcomparativeadvantage.Besides,nationsaremotivatedtotradeornottotradewitheachotherbyinternationalanddomesticpoliticalneeds.2.Whatistheprincipalofcomparativeadvantage?CreatedbyDavidRicardo,theprincipalofcomparativeadvantageisabasictheoryforspecializationandtradewhichsaystrade
3、willbenefitbothnationsprovidedonlythattheirrelativecosts,thatis,theratiosoftheirrealcostsmeasuredbylabor-houroranothercommodity,aredifferentfortwoormorecommodities.Inotherwords,tradedependsondifferencesincomparativecostoropportunitycost,andonenationcanprofitablytradewithanothereventhoughitsrealco
4、stsarehigher(lower)ineverycommodity.3.Whatarethebenefitsofinternationaltrade?Thebenefitsofinternationaltradeincludecheapergoods,morechoicesofgoods,widermarketfordomesticproducers,andthegrowthofdomesticandworldeconomy.4.Whydoestradeprotectionismstillexistdespitethebenefitsofinternationaltrade?Trad
5、eprotectionismexistsforeconomicandpoliticalreasons.Nationswanttoprotecttheirinfantindustriesandjobsfromforeigncompetition,tomaintainbalanceofpayment,andnottosupporttheirfoes.5.Wantaresomeoftheformsoftraderestrictions?Traderestrictionstaketheformsoftariffbarriersandnon-tariffbarriers.6.Whatisatari
6、ffbarrierandwhatisanon-tariffbarrier?Atariffbarrierisadirectmonetaryburdentodiscouragetradeinwhichadutyorfeeisleviedongoodsbeingimportedinto(orexportedoutof)acountry.Anon-tariffbarrier,ontheotherhand,isnotdirectlyamonetaryburdenthoughitoftencostsmoretimeandmoney.Non-tariffbarriersincludequota,lic
7、ense,foreignexchangecontrol,technicalstandards,andregulations,etc.Terms1.Atariff:isadutyorfeethatisleviedongoodsbeingimportedinto(orexportedoutof)acountry.2.Surtax:isanadditionaltax.Itmayalsobetemporaryanddiscriminator
