1.7 Trading Types of Advertising Trade may take place at a domestic or at an international level. Home trade is the exchange of goods or services within the of a country. It can be carried out easily since it does not involve any currency exchange and it is free from government restrictions. However, countries tend to share their prosperity, know-how, and products with other countries by exporting their surpluses and importing what they need. Home trade boundaries International trade is much more complex because it involves dealing with different countries, cultures, languages, regulations and restrictions. However, international trade exists because some goods: • can be found only in certain countries; • are cheaper to produce abroad for different reasons; • are of superior quality to local products. International trade Benefits of international trade • : by increasing production output to serve a larger market, countries are able to reduce cost per unit and sell at a lower cost. • with other nations brought about by the exchange of different products, know-how, and expertise. • of a country’s : by having the possibility to obtain what it needs also from other sources, a country can specialise in the activities it can do best, more efficiently and at a lower cost. • , because more variety and better quality goods are available. • because of competition, and thus greater purchasing power and better living standards for consumers. • : by trading abroad there are more chances to limit potential risks derived from operating on a single market. Economies of scale Closer ties Exploitation comparative advantage Break of domestic monopolies Lower prices Market diversification Risks of international trade • Currency . • Unexpected changes in a country’s political policy such as . • Possible caused by excessive competition and a consequent increase of unemployment. • Possible with the subsequent risk of losing one’s autonomy. • Possible of economies which specialised in the production of certain products in case demand for those products decreases. exchange rate fluctuations trade barriers destruction of local economy dependency on imported goods vulnerability