South Asian free trade agreement 

South Asian free trade agreement The agreement on south Asian free trade area (SAFTA) was signed by all the member states of SAARC during the 12th SAARC summit held in Islamabad on 4-6th January. As a result, SAFTA came into force from 1st January, 2006. SAFTA is a motivation for the commitment to strengthen intra […]

World trade organization (WTO) 

World trade organization (WTO) The World Trade Organization (WTO) is an international, multilateral organization which deals with the global rules of trade between nations. It is the policeman of global trade. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible. Headquarter of WTO is located in Geneva, Switzerland. It […]

Comparative cost theory of international trade 

This theory is developed by a classical economist David Ricardo. According to this theory, the international trade between two countries is possible only if each of them has absolute or comparative cost advantage in the production of at least one commodity. This theory is based upon following assumption There are only two countries and two […]


Protectionism The doctrine of international trade with governmental intervention is called protectionism. According to it, the government must protect the national interest with tariff an non tariff barriers. Domestic consumer, industries and domestic socio cultural values should be protected or preserved by the government through taxes, subsidies, and other different types of direct and indirect […]

Free trade 

Free trade The international trade without governmental intervention is called free trade. In this case, the government doesn’t restrict export and import through any types of tariff and non tariff barrier there is free movement if products from one country to another country. Each country can promote export only if it produces qualitative goods with […]

Balance of payment 

Balance of payment It is defined as systematic records of all types of transaction of a country with the rest of the world. It is the records of amount paid to and amount received from the rest of the world. The amount received may be repayable or not and amount paid may be receivable or […]

Balance of trade 

Balance of trade It is defined as net export i.e. relative export to import. It is systematic records of export and import. The difference between total export and total import of a country in a fiscal year gives balance of trade. On the basis of total export and total import, there are three types of […]

Role of international trade 

Role of international trade: Specialization: Every country can take more benefit specializing in the production of goods which can be produced using local resources, technology and human resource. International specialization leads to proper allocation of world’s resources and leads to production of goods under very favorable conditions Consumer satisfaction and benefits: Consumers of a country […]

Meaning of international trade 

International trade is defined as the buying and selling of goods and services between two or more countries. It simply means export and import. In export, there is outflow of goods and services but inflow of money. In import, there is inflow of goods and services but outflow of money. On the basis of export […]


The bank is an institute which deals with money and credit. It accepts deposits from the public, next the fund available to those who needs it and helps in remittance of money from one place to other. A modern bank performs variety of function so it is difficult to define a bank in a single […]