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International Trade

International trade encompasses the exchange of goods and services between residents of different countries. The bulk of international trade consists of what economists describe as “merchandise trade,” or trade in physical goods. The other category is services trade, the exchange of nonphysical goods. The largest categories of merchandise trade are machinery and transportation equipment, agricultural products and foodstuffs, and crude oil and petroleum products. The largest categories of services trade include business, professional and technical services, insurance and finance, and travel and transportation.

Some Characteristics of International Trade

The increasing prominence of international trade is illustrated by the fact that the growth of world merchandise trade has consistently outpaced the growth of world production since the middle of the 20th century. As a result, an increasing percentage ...

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