From the course: Cert Prep: CFA Exam Level 1
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International trade and capital flows
From the course: Cert Prep: CFA Exam Level 1
International trade and capital flows
- [Instructor] Global trade is one of the most powerful forces shaping the world economy and, increasingly, the stock market. In this lesson, we'll look at the benefits and costs of international trade, explain the core idea of comparative advantage, and explore the balance of payments, a key tool for tracking cross-border flows. International trade connects countries through the exchange of goods, services, and capital. It boosts growth, expands consumer choices, and gives companies access to global markets. But it also creates dependencies, vulnerabilities, and competitive challenges. So thinking about the benefits of international trade, trade allows countries to specialize in what they produce best. This leads to greater efficiency and lower costs. It also leads to lower prices for consumers and larger markets for firms, as well as greater variety of goods and services and the transfer of technology and innovation…
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