The Differences Between Domestic Trade And International Trade

February 3rd, 2009 Comments off
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The following are the major differences between domestic trade and international trade:-

1.Mobility in Factor Of Production

  • Domestic Trade: Free to move around factors of production like land, labor, capital and labor capital and entrepreneurship from one state to another within the same country
  • International Trade: Quite restricted

2.Movement Of Goods

  • Domestic trade: easier to move goods without much restrictions. Maybe need to pay sales tax,etc
  • International Trade: Restricted due to complicated custom procedures and trade barriers like tariff, quotas or embargo

3.Usage of different currencies

  • Domestic trade: same type of currency used
  • International trade: different countries used different currencies

4.Broader markets

  • Domestic trade: limited market due to limits in population, etc
  • International trade: Broader markets

5.Language And Cultural Barriers

  • Domestic trade: speak same language and practice same culture
  • International trade: Communication challenges due to language and cultural barriers

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