Explain the concept of ‘International Trade’. Discuss the Financial Instruments that are used in Financing International Trade?

Concept of International Trade:

International trade refers to the exchange of goods, services, and capital across borders between nations or entities. It plays a vital role in the global economy by facilitating the specialization of production, promoting economic growth, and enhancing consumer welfare. International trade occurs when countries have different comparative advantages in producing goods and services, leading to mutually beneficial exchanges.

Several factors drive international trade, including:

1. Comparative Advantage: Countries specialize in producing goods and services where they have a comparative advantage, meaning they can produce these goods at a lower opportunity cost than other nations.

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