Question

Discuss the history of trade theory: describe the evolution of the various trade theories and explain how their elements still impact trade today.

Answer 1

Trade theory is the oldest branch of the economics it is as well as simplest theory of international trade ,basically trade is the concept of exchange of goods and services between two countries or entities .Trade is possible between two countries or entity because they believe they get benefited from exchange .They may need or want the goods and services .

MERCANTILISM is the earlier method to determine the wealth of any country it determined the amount of gold and silver holding of that company .It also believed that company can increase its wealth by increasing export and decreasing import .The ultimate goal of each and every country is to make trade surplus that is possible by increasing export and decreasing imports .many nations promoted export and restricting import which is called protectionism that is used in today senario as well.countries like Japan,Taiwan,Singapore,even Germany still encourage èxport and discourage import.