Question

How can imports benefit our economy? Discuss about Gains from Imports vs. Exports.

Answer 1

soln.

Trade is a mutual activity in which both the parties must perform and must be benefited, as the basic motivation of trade is to have the benefit or the gain. In case of autarky division of international labour doesn't take place, as it is the benefit that all nations earn during international trade. To better understand this one must go through the of comparative cost advantage.

It is not always required to sell to have benefit from the trade many a times it is also required to have purchases, puchases of those goods in which a country is not having efficiency in production the county has to import such goods and shifts its production capacity to some where else where it has efficiency. Apart from this a effcient productive country may imports Raw meterial, cheap labour of foreign investement in the country.

Gains from Imports and Exports.

Gains from imports	Gains from exports
By imports technological upgraded products introduce in the market.	Exports provides the oppertunity to explore new markets for the product and provide hadsome incentive to the producers
Many times importing product is cost effective than producing it locally	Through Exports a producer can enhance its sales capabalities which makes his business more financially sound and stable.
Importing goods is an way to lead the market as through R & D producing an upgraded product is quite expensive and time consuming.	Exports generate foriegn reserves for the nation which further can be used to dominate the world economy and to have the supermacy over the compititors.
Imported goods are generally high quality products through which stadard of living of the poppulation go rise.	Exporting of resources creates effective utilisation of obsolate resources and it also contributes to the national income.
Importing goods encourages the local producers to produce high quality product in a cost effective manner which leads the economy on the way of development	Exporting goods creats the oppertunity for the nation to bring favourable biletral trade which further creates investement options for the nation.