International economics facts for kids

International economics is a field of macroeconomics. It looks at the effect of trade of goods and services between different countries. Generally, there's trade between contries, if any of the folloowing is true:

• Certain goods or services are legal, but not available in a country; Germany does not grow bananas. So bananas need to be imported.
• The costs of production are different in different countries: It may be better to produce something in one country, and export it to another country.
• A country has a compoarative advantage at producing certain goods.

In the end, countries and economies are better off with specialization and trade.

See also

In Spanish: Economía internacional para niños