Today, we are discussing why international trade exists. Can anyone tell me what trade means?

Exactly! Trade is the voluntary exchange where one party sells and another buys. So, how do you think this leads to international trade?

That's the concept of comparative advantage! Countries trade to obtain commodities they can’t produce efficiently themselves.

Exactly! Specialization like this benefits everyone involved. Now let’s remember this with the acronym 'S.C.A.' for Specialization, Comparative advantage, and Access.

Let’s go back in history a bit. How did trade start before money?

Correct! Imagine if a potter needed plumbing services. He would have to find a plumber who needed pots. What are the challenges with this system?

Precisely! This inefficiency led to the introduction of money, which made trade much easier.

Great connection! Money indeed evolved into an essential medium for trade. Let’s review that with the rhyming phrase: 'Barter’s a bother; we need the dollar!'

Now, let's discuss factors that contribute to international trade! Can anyone name them?

Yes! The difference in national resources is a key factor. For instance, some countries have rich minerals while others have fertile lands. What else?

Absolutely! A larger population can mean a bigger market for both local goods and imports. How does transport come into play?

Exactly! Modes of transport have evolved and greatly impacted trade. Let’s reinforce this with a mnemonic: 'P.E.M.T' for Population, Export needs, Modes of transport, and Trade agreements.

Next, let’s consider how trade balance works. What do you think balance of trade means?

Correct! A positive balance means exports exceed imports, benefiting the economy. What could happen if a country has a negative balance of trade?

Exactly – excessive imports can exhaust financial reserves. Let’s summarize this as: 'Balancing trade, avoiding the financial trade!'