Comparative and Absolute Advantage Of International Trade Essay

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Analyze measures of economic growth, and comparative and absolute advantage in international trade for the following countries:

Introduction

International business takes place because of the differences in profitable aspects in different nations. While value contrasts are the key factors that drive international business, the wide range of important elements leads to contrasts in cost across nations. There are a number of perspectives regarding global trade. Absolute advantage involves comparing the efficiency of several economies or producers. An economy that uses less amount of input to produce a product is considered to have absolute advantage. On the other hand, comparative advantage is the capacity of an economy to produce a given product or service at a low opportunity cost than others. Irrespective of the likelihood that a country may have absolute advantage in delivering goods; several countries can have distinctive comparative advantages. Comparative and absolute advantages are vital components in international business and theory. In absolute advantage, a country can produce more products in a unit of significant contribution compared to others. Conversely, in comparative advantage there is the opportunity that a country has absolute advantage in every type of production, while others may benefit by specializing in as well as exports. This paper presents an analysis of measures of economic growth; and absolute and comparative advantage in USA, China, Democratic Republic of Congo and Saudi Arabia.