International Trade

International trade is the purchase, sale or exchange of goods and services across national borders. (Business Dictionary, 2011) International trade is important not only for the country exporting goods by means of revenue for the exporting country but also for the importing country by means of bringing in goods that a country may not have available. This trade relationship between countries provides a greater choice of goods to consumers and provides for job creation as well.
  International trade and world output relate to each other because of an economic stance. If the world output slows so does international trade. When the world output increases so does international trade. Economic recessions are one of the main reasons as to why international trade would decrease. When in a recession it means fewer consumers purchase domestic and imported items. A recession means that a countries monetary system looses value. Thus resulting in higher costs for imports and makes domestic products more affordable.
Although international trade and world output are related, trade continues to grow faster than world output. The volume of world trade has increased significantly relative to world output; some of this increase can be accounted for by the fact that traded goods have become cheaper over time compared to the items that are not traded.
The quantity of world output in a given year can affect the international trade for that year.   The slower a countries economic output the slower the volume of international trade. The same is true for the reverse, the higher the output from a country the greater the international trade. Trade decreases and increases with the world’s economy, recession causes trade to decrease due to consumer spending because of economic uncertainty. When trade increases the recession decreases and consumers begin to spend.
Exchange rates can also affect international trade, as countries currency weakens to trading countries it becomes more costly...