Ø Foreign Trade Plays a vital role in the economic development of a country.
Ø When a country specializes in the production of those goods which it can produce cheaper and import those goods which others can produce reat a lower cost, it gains from trade and there is increase in national income.
Ø The classical and neo- classical economists believe that international trade contributes greatly to the economic growth of the country.
Ø Robertson calls external trade as an “Engine of Growth”.
Ø Enables under developed countries to obtain raw materials, plant, machinery, and equipment, technical know-how.
Ø Economists also hold that foreign trade hinders the development of underdeveloped countries.
Ø Historically it has resulted in the exploitation of under developed countries.
Ø Helps the development of an underdevelopment of an underdeveloped economy by expanding productive capacity.
Ø Speeds up economic development of underdeveloped countries.
Ø Provides necessary infrastructure.
Ø Widens the extent of markets.
Ø Has great educative effect.
Ø Encourages inflow of capital.
Ø Brings efficiency in production.
Ø Enlarges a country’s consumption capacities.
Ø Promotes greater international and domestic equality by equalizing factor prices.
Ø Promotes economic cooperation between countries.
Ø Raul Prebisch, Hans Singer, and Gunar Myrdal who hold the view that foreign trade has hindered rather than helped the economic development of under developed countries.
Ø When a country specializes in the production of those goods which it can produce cheaper and import those goods which others can produce reat a lower cost, it gains from trade and there is increase in national income.
Ø The classical and neo- classical economists believe that international trade contributes greatly to the economic growth of the country.
Ø Robertson calls external trade as an “Engine of Growth”.
Ø Enables under developed countries to obtain raw materials, plant, machinery, and equipment, technical know-how.
Ø Economists also hold that foreign trade hinders the development of underdeveloped countries.
Ø Historically it has resulted in the exploitation of under developed countries.
Ø Helps the development of an underdevelopment of an underdeveloped economy by expanding productive capacity.
Ø Speeds up economic development of underdeveloped countries.
Ø Provides necessary infrastructure.
Ø Widens the extent of markets.
Ø Has great educative effect.
Ø Encourages inflow of capital.
Ø Brings efficiency in production.
Ø Enlarges a country’s consumption capacities.
Ø Promotes greater international and domestic equality by equalizing factor prices.
Ø Promotes economic cooperation between countries.
Ø Raul Prebisch, Hans Singer, and Gunar Myrdal who hold the view that foreign trade has hindered rather than helped the economic development of under developed countries.
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