International trade is the exchange of goods, services, money, and labor between different countries. It happens because nations have different resources, technologies, and skills.

Key principles include:

• Comparative advantage: Countries focus on producing goods they can make at a lower cost than others, then trade them.
• Gaining more: Trade allows countries to consume more products and enjoy lower prices than if they produced everything themselves (a state called autarky).
• Terms of trade: This measures the price of a country’s exports compared to the price of its imports.
• Current account: This is a record of all money flowing in and out of a country due to trade and investment.

Global trade patterns show that countries with many workers often export labor-intensive goods, while countries with advanced technology export high-tech, valuable products. International trade is a major part of globalization and is closely related to how money flows between countries and the use of different national currencies.