Heterogeneous Markets

In the international economy world markets lack homogeneity on account of difference in language, preferences, customs, weights and measures, etc. The behaviour of international buyers in each case would therefore be different. For instance the Indians have right-hand driven cars while Americans have left hand driven cars. Hence, the markets for automobiles are effectively separated. Thus, one peculiarity of international trade is that is involves heterogeneous national markets.

Different national groups: An obvious difference between home trade and foreign trade is that trade within a country is trade among the same group of people, whereas trade between countries runs between differently cohered groups. The socio-economic environment differs greatly between nations, while it is more or less uniform within countries. Friedrich List, therefore, put that: “Domestic trade is among us, international trade is between us and them”.

Different political units: International trade is a phenomenon which occurs between politically different units while domestic trade occurs within the same political units. The government in each country is keen about the welfare of its own nationals against that of the people of other countries. Hence, in international trade policy, each government tries to see its own interest at the cost of the other country. As a matter of fact, national sovereignty exerts its great influence on the character of economic activity and trade.

Thus, the task of international economics is to discover a common ground if it can, for economic relationship which will satisfy the various components of a peaceful world.

Different national policies and government intervention

National rules, laws and policies relating to trade, commerce, industry taxation etc. are more or less uniform within a country, but differ widely between countries. Tariff policy, import quota system, subsidies and other controls adopted by a government interfere with the course of normal trade between it and other countries. Thus, state interference causes different problems international trade while the value theory in its pure form, which assumes laissez fare policy, cannot be applied into the international trade theory.

Different currencies: Perhaps the principle difference between domestic and international trade is that the latter involves the use of different types of currencies. That is why there is the problem of exchange rates and foreign exchange. It is a fact that different countries follow different foreign exchange policies. Thus, one has to study not only the factors which determine the value of each country monetary unit but also the fact of divergent practices and exchanges resorted to.

Specific problems: International economic relations give rise to certain specific problems of a peculiar nature, e.g. international liquidity, international monetary co- operation, evolution of international organizations like the European Common Market etc. Such problems can never arise in regional economics. There are to be studied separately and solved by “international economics” against the background of world movements at large.

Services: - Heterogeneous Markets Homework | Heterogeneous Markets Homework Help | Heterogeneous Markets Homework Help Services | Live Heterogeneous Markets Homework Help | Heterogeneous Markets Homework Tutors | Online Heterogeneous Markets Homework Help | Heterogeneous Markets Tutors | Online Heterogeneous Markets Tutors | Heterogeneous Markets Homework Services | Heterogeneous Markets