‘‘In modern times international trade is the basis of the world economy.’’ Support the statement with examples.

‘‘In modern times international trade is the basis of the world economy.’’ This statement can be supported by the following examples:

a) International trade is the result of specialisation in production.

b) It helps the world economy when all the countries practice specialisation and division of labour in the production of goods and services.

c) All the types of specialisation pave the way for trade.

d) It is based on the principle of comparative advantage.

e) Complementarity and Transferability of goods and services.

f) It also helps in the formulation of foreign policies.

g) All the countries willingly participate in this type of trade due to the well-developed infrastructure and resources available.