VOCABULARY. embraces - охватывает

embraces - охватывает

has been gaining increasing significance – приобретает всевозрастающее значение

flow of funds– приток капитала (денежных средств)

makes everyone better off – делает каждого состоятельным

interlinked global economy – взаимосвязанная мировая экономика

impose restrictions – вводить ограничения

customs duties – таможенные пошлины

specific tariffs -специфические тарифы (пошлины)

a tax per unit of the commodity – пошлина (налог) на единицу товара

ad valorem – пошлины “ад валорем”, т.е. с объявленной цены

regulations – нормы, инструкции

artificial – искусственный

retaliated – ответили тем же

The study of economics would be incomplete without an understanding of the nation’s role in the world economy. The study of the world economy is known as “international economics”. International economics embraces two broad areas of interest: international trade and international finance. World trade has been gaining increasing significance among nations. Why do nations trade? The answer is that nations have different quantities and qualities of economic resources and different ways of combining them. As a result, each country can produce certain goods more efficiently, or at relatively lower costs, than others.

When Honduras exports bananas to Switzerland, they can use the money they earn to import Swiss chocolate, or to pay for Kuwaiti oil, or a vacation in Hawaii. The basic idea of international trade is the use of foreign currencies to pay for the goods and services crossing international borders. Although global trade is often conducted in U.S. dollars, the trading itself involves various currencies. Japanese TV set is paid for in euros in Berlin or Rome, and German or Italian cars are paid for in U.S. dollars in Boston. Indian tea, Brazilian coffee, and American films are sold around the world in currencies as diverse as Turkish liras and Mexican pesos.

Whenever a country imports or exports goods and services, there is a resulting flow of funds: money returns to the exporting nation, and money flows out of the importing nation. Trade and investment is a two-way street, and with a minimum of trade barriers, international trade and investment usually makes everyone better off.

In an interlinked global economy, consumers are given the opportunity to buy the best products at the best prices. By opening up markets, a government allows its citizens to produce and export those things they are best at and to import the rest, choosing from whatever the world has to offer.

Despite the fact that trade is of great importance for each nation, all countries impose restrictionsof one form or another to protect some of their domestic industries. The restrictions may be of several types: tariffs, import quotas, nontariff barriers. Tariffs are customs duties or taxes imposed by a government on the importation of a good. Tariffs may be specific, in the form of a tax per unit of the commodity, or ad valorem, based on the value of the commodity. Import quotas are laws that limit the number of units of a commodity that may be imported during a specified period. Nontariff barriers are any laws or regulations, other that tariffs, that nations impose in order to restrict imports. For instance, to “protect the health and safety” of their citizens, many countries establish higher standards of quality for various kinds of imported goods than for similar goods produced domestically.

Some trade barriers will always exist as long as any two countries have different sets of laws. However, when a country decides to protect its economy by erecting artificialtrade barriers, the result is often damaging to everyone, including those people whose barriers were meant to protect.