Why are trade theories important in developing a country’s risk analysis?
Expert Answer
Exchange of raw materials or manufactured goods or services across national borders is considered as trade theory. They are classified into two parts; CLassical Trade theory and New Trade theory.
Trade theories helps to understand us:-
Country’s competitive advantage
How to reduce the lowest opportunity cost?
Analysis of cost and benefits in terms of economy of scale
Helps to break down domestic monopolies
Encourages transfer and exchange of technologies
It helps to understand how employment can be increased