Question 1 of 11intermediate💡 UnderstandShort Answer3 marks

Differentiate between international trade and international business.

Correct Answer

International business is a much broader term than international trade. While international trade specifically refers to the export and import of goods and services across national boundaries, international business encompasses a much wider scope of activities.

International business includes not only international trade but also other operations such as production and marketing of goods and services in foreign countries. It covers all business activities that take place across national frontiers.

Thus, international trade is essentially a subset of international business. The former is limited to cross-border movement of goods and services, while the latter comprises both trade and production activities across frontiers.

Exercise: EXERCISES - Short Answer Questions | Q: 1 | (Page 31)
For More Understanding

Explanation

The textbook clearly establishes that international business is a broader concept than international trade. International trade is limited to exports and imports of goods and services, while international business encompasses trade plus production and marketing activities in foreign countries. This distinction is explicitly mentioned in Section 11.1.4 and reinforced in the Summary of the chapter.

Solution Steps

  1. Step 1: Identify that international business is broader than international trade

  2. Step 2: Define international trade as export and import of goods and services

  3. Step 3: Explain that international business includes trade plus production and marketing activities abroad

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