In his book The Wealth of Nations, Adam Smith talks about how a country’s imports and exports should be determined. He said that the main goal in trade is to produce more than one consumes for oneself so that there will be something left over for other people. In order to do this, he says that countries should focus on what they are good at producing and selling them abroad.
It also helps if the thing you are selling abroad has greater value than it does cost to import it into your own country because then you have an “excess” which can be used to purchase other goods from another country. So countries should export things they produce cheaply with high demand (that means lots of buyers) and import things they don’t produce easily but are in high demand.
In The Wealth of Nations, Adam Smith talks about how a country’s imports and exports should be determined. He said that the main goal in trade is to produce more than one consumes for oneself so that there will be something left over for other people. In order to do this, he says that countries should focus on what they are good at producing and selling them abroad. It also helps if the thing you are selling abroad has greater value than it does cost to import it into your own country because then you have an “excess” which can be used to purchase other goods from another country. So countries should export things they produce cheaply with high demand (that means lots of buyers).
