International economics

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International economics is a field of macroeconomics. It looks at the effect of trade of goods and services between different countries. Generally, there's trade between contries, if any of the folloowing is true:

  • Certain goods or services are legal, but not available in a country; Germany does not grow bananas. So bananas need to be imported.
  • The costs of production are different in different countries: It may be better to produce something in one country, and export it to another country.
  • A country has a compoarative advantage at producing certain goods.

In the end, countries and economies are better off with specialization and trade.