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Question
"Advancement of international trade of a country is an index to its prosperity." Support the statement with suitable examples
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Solution
Advancement of a country's international trade is an index of its economic prosperity because:
i) International trade is in fact an 'economic barometer' of a country. A healthy volume of it ensures a trickling down of prosperity into the macro economy as well.
ii) No country is self sufficient in all resources or services. It has to resort to international trade in order to satisfy one or the other need of its economy.
iii) If the balance of international trade is favourable to a country, it can earn more foreign exchange and hence strengthen its financial position in the market.
iv) International trade induces a country to develop secondary and tertiary sectors for exporting goods which can fetch more foreign exchange.
v) A country's economic prosperity can be gauged by the health of its international trade.
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