Question

What do you think about this?

Although the trade relationship between the United States and other countries has changed in the recent past, especially China, but in the past 50 years, with the popularity and development of the Internet and the birth of the World Trade Organization, it has greatly promoted and accelerated With the pace of world trade exchanges, the characteristics of various countries can also be transmitted and displayed to the world. With the continuous trade between countries, the friendly relations between countries have been strengthened, and international transactions have become easier.

Answer 1

The world economy today has become more integrated in its approach than it ever was in managing enterprises, taking help from other countries and managing its resources effectively. We have the example of countries such as China and India which have foregone their approach towards protectionism and are largely today seeing growth rates between 5-10% per year which was unheard of for these countries before.

The core reason for this to happen is that they have extended trade relationships and have allowed companies to come into existence and do trade freely. These countries previously thought that protectionism or the approach of restricting trade would help local industries in growing, but soon realized that this approach rather led to loss of revenue for the economy.

Instead, today post formation of International Institutions such as the World Bank, international economics has changed and countries have almost abolished numerous trade tariffs and barriers which existed. The exchange rates have also become more flexible as countries readily today adopted dollar instead of the old gold standards wherein they had to maintain gold and this decided the value of their currency.

Over a period of time, as further internet facilitated online transactions and countries began expanding themselves and heavily invested towards ensuring that labor productivity was at its peak, the concept of protectionism collapsed and the world economy as an overall saw higher consumerism, better aggregate demand and increased production as well as competition which encouraged development, innovation and better usage of natural resources which has been pivotal for the United States in maintaining its growth as well as for other countries in ensuring that their life style and the amount of benefit which each person gets increases over a period of time.

As economies became interconnected, trade volumes grew and exchange of money, goods and ideas took place which previously never had happened. These are the key characteristics of a capitalist economy based society wherein the forces of demand and supply help in setting prices instead of government intervention. This is at the core of development which the United States has always stood by and today has readily been adopted by all major nations.

Please feel free to ask your doubts in the comments section if any.