Importance of international trade
i. Foreign Exchange
Currency value for one country can be effected changes in currency value for another country. If the inflow of foreign exchange increase, then national income also increase.
Example: Malaysia gain more foreign exchange like USD$ from US, so Malaysia will get increasing in income.
ii. Global Market
International trade can offer new markets to local business. Local businessman can expand market for product until international market for product reach surplus in country.
Example: an entrepreneur would extend his market to US through international trade based on term of export and import.
iii. Technology Transfer
The international trade able to create relationship between countries and encourage technology transfer.
Example: International trade between Malaysia and Japan can encourage technology transfer from Japan to Malaysia.
iv. Contribution to economy
The international trade can encourage the entrance of outside firm into the country. So, this can provide many job opportunities to locals and can help to reduce unemployment problem in the country.
Example: US companies come to Malaysia and start their business in Malaysia. Then, many job opportunities provided to Malaysian people.
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