Why is trade necessary? Explain with example

Padhanu

Did you know?

Did you know that trade is necessary for a thriving economy and global development? Trade allows countries to specialize in the production of goods and services they are most efficient at, while importing those they are not. This results in increased productivity, better allocation of resources, and improved standards of living for individuals. For example, consider a country like Switzerland, known for its high-quality watches. Switzerland specializes in watch manufacturing and exports its watches to other countries, earning revenue in return. Simultaneously, they import goods like electronics from other nations, benefiting from the expertise and competitive prices offered by those countries. This mutually beneficial trade relationship helps stimulate economic growth, foster innovation, and create a more interconnected world.