international trade theory

International trade theory explores how and why countries exchange goods and services. It explains the benefits of trade, like increased efficiency and access to resources. Key concepts include comparative advantage, which suggests that nations should specialize in producing what they can create most efficiently, and thus trade with others for what they need. This specialization can lead to more variety and lower prices for consumers. Overall, international trade allows countries to maximize their economic potential and improve living standards by taking advantage of global resources and markets.