International economics is a science that addresses the effect of economicinterdependence between countries in the world, both in terms of international trade andinternational credit markets. U.S. energy sources, for example, relies heavily on foreignmanufacturers, while Japan imports almost half of the food consumed by its inhabitants.In contrast, developing countries are very membutukan technology developed andproduced by industrialized countries. In the long run, international trade patterns are determined by the principle of comparative advantage.
Feels the influence of international trade on prices, national income, and level of employment in the countries involved in international trade. Exports will increasedemand, the amount of goods and services people want in the country. In contrast,imports will reduce domestic demand in the community. Demand will affect employment and national income, and among others will depend on the magnitude of net exports,namely the difference between exports and imports. If net exports are positive, meaning that exports greater than imports, employment and national income tends to rise. The amount of net exports is largely determined by the exchange rate the country concerned.For example, the rupiah fell against the U.S., the price of exports from Indonesia will be relatively cheaper in the U.S., so exports will likely increase. In contrast, prices of U.S.goods relative to imports would be costly, so will tend to decline. Thus, the decline inexchange rate alone would tend to increase net exports, and vice versa. Thus,international activities and events will affect the domestic economy, through the influence of exchange rate on import, export, and eventually demand society.
Feels the influence of international trade on prices, national income, and level of employment in the countries involved in international trade. Exports will increasedemand, the amount of goods and services people want in the country. In contrast,imports will reduce domestic demand in the community. Demand will affect employment and national income, and among others will depend on the magnitude of net exports,namely the difference between exports and imports. If net exports are positive, meaning that exports greater than imports, employment and national income tends to rise. The amount of net exports is largely determined by the exchange rate the country concerned.For example, the rupiah fell against the U.S., the price of exports from Indonesia will be relatively cheaper in the U.S., so exports will likely increase. In contrast, prices of U.S.goods relative to imports would be costly, so will tend to decline. Thus, the decline inexchange rate alone would tend to increase net exports, and vice versa. Thus,international activities and events will affect the domestic economy, through the influence of exchange rate on import, export, and eventually demand society.
Factors that encourage interstate commerce, among others. (a) The diversity ofproduction conditions, (b) saving the cost of production / specialization, and (c)differences in taste.
(a) Diversity of Production Conditions
Diversity refers to the potential conditions of production factors of production owned bythe state. For example Indonesia, has great potential in producing agricultural goods. In other words, through trade, a country can obtain the goods that can not be produceddomestically.
(b) Production Cost Savings / Specialization
International trade allows a country to produce goods in large quantities, resultingIncreasing returns to scale or an average cost of production is declining while the number of goods produced increases. So, if a country specializes in producing and exportingcertain goods, the average production cost will come down.
(c) The different tastes
Even if the conditions of production in all countries are equal, but each country will probably do a trade if they taste different. For example, Norway and Sweden to exportmeat to export fish. Both countries will gain the benefits of this trade and the increasingnumber of people happy.
Diversity refers to the potential conditions of production factors of production owned bythe state. For example Indonesia, has great potential in producing agricultural goods. In other words, through trade, a country can obtain the goods that can not be produceddomestically.
(b) Production Cost Savings / Specialization
International trade allows a country to produce goods in large quantities, resultingIncreasing returns to scale or an average cost of production is declining while the number of goods produced increases. So, if a country specializes in producing and exportingcertain goods, the average production cost will come down.
(c) The different tastes
Even if the conditions of production in all countries are equal, but each country will probably do a trade if they taste different. For example, Norway and Sweden to exportmeat to export fish. Both countries will gain the benefits of this trade and the increasingnumber of people happy.
Benefits of International Trade;
1. efficiency
Through international trade, each country does not need to produce all its needs, butenough to produce what can be produced in the most efficient compared to other countries. Thus, it would create efficiency in the allocation of economic resources of the world.
2. The expansion of consumption and production
International trade also allows wider consumption for the population of a country.
3. increased productivity
Countries that specialize in producing certain goods will try to improve its productivity.Thus they will stay ahead of other countries in producing the goods.
1. efficiency
Through international trade, each country does not need to produce all its needs, butenough to produce what can be produced in the most efficient compared to other countries. Thus, it would create efficiency in the allocation of economic resources of the world.
2. The expansion of consumption and production
International trade also allows wider consumption for the population of a country.
3. increased productivity
Countries that specialize in producing certain goods will try to improve its productivity.Thus they will stay ahead of other countries in producing the goods.
