International trade is the purchase, sale, or exchange of goods and services across national borders. International trade provides a country's citizens a greater choice of goods and services and is important in the creation of jobs in many countries. (Wild, Wild, and Han 2005)
The quantity of world output in a given year will have an effect on the level of international trade for that year. The slower a country's economic output the slower the volume of international trade; a higher output spears greater international trade. In times of economic recession trade will slow because people are less certain about their financial future and will tend to buy fewer domestic or imported products. Another reason output and trade move simultaneously is a country that is in a recession often has a currency that is weak relative to other nations, thereby making imports more expensive than a country's domestic products. With world output and trade being so closely related the amount of world trade has improved considerably relative to world output and can be attributed to the fact that the goods traded have become less expensive over time compared to goods that are sold domestically.
Sixty percent of international trade patterns, in merchandise, are dominated by the flow of high-income economies of the world followed by a thirty-four percent trade between high, middle, and low income nations leaving trade between middle and low income countries at six percent. The importance of knowing these statistics lets us know if there is a high level of trading going on between some of the richest and poorest nations of the world and also helps in determining if there is a considerable amount of trade with nations whose economy may be poor. The ...