After read this book P487-497, do a 4 mins business Power Point .
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WealthofNations2.pptxWealth of Nations
Course Name
Student Name
The Course of Human Prosperity
Countries preferred local trade
This was to promote local manufacturers
This was aimed at cutting down the products of European market
Monopoly of the European products ended
Case of China
Case of Egypt
Case of Indostan
Famous for agriculture and manufacturing
Only excess was exported by the foreigners
Classification of Trade and Mechanism
Home Trade
Foreign Trade
Carrying Trade
Mutual Benefits
Exchanges of Agricultural produces and manufacturing
Equal value of commodities
Returns from foreign trade of consumption in comparison to home trade
Productive labor of the country
Foreign Goods for Home Consumption
May be purchased with some other foreign goods
May also be purchased with the domestic goods
Case of war and conquest excepted
Repetitive trade of the same goods
Returns on the trade
Gains by the traders
Quick gains by the former traders
Slow gains from the subsequent traders
Foreign Goods for Home Consumption(Cont.)
Nature of the trade
Encouragement and support
Transportation and freight expenses
Availability of the home resources
Needs for foreign goods
Planning of the local traders
Planning of the Foreign Traders
Effects of Foreign Trade
Can encourage Public Relations
Can encourage home trade to be converted into foreign trade
To get the benefits of globalization
To promote the transportation Industry
To exploit the home competitive advantage
Effect of transportation on trade
Traders not always get benefits because of Transportation
Transportation Industry sometimes may grow, but not the trade
Capital and Labor in the Home Country
Higher Capital
Higher Productive Labor
Higher Annual Produce
Higher exports and Foreign Trade
Political intervention promotes local consumption
Local politics promotes local monopoly and less dependence on other nations
Excess can be sent out to get the maximum benefits
Usage of extra labor and capital is discouraged
What is Done with the Surplus Foreign Trade?
Capital and labor is used to produce local goods
Home produce is exchanged with the foreign produce
Surplus foreign produce is the again sent to other countries
This surplus is then used to gain maximum returns
These goods are sent to those countries with which trade can be done for other needed goods
This mechanism is planned and used to gain maximum benefit
The Carrying Trade
Foreign trade is facilitated with the help of carrying trade i.e. sea, air or land
Every country produces those goods which are the most profitable in the country
These are then exchanged with those who have their scarcity
Use of labor and capital is made wisely by every country
Carrying trade helps sending the amounts of goods from one place to the other
Reference
Smith, A. (1901). Wealth of Nations. New York: COSIMO Classics.
