Reasons for state trading, Microeconomics

There are different reasons for state trading. Important reasons are given below.

(i) State may directly buy the goods required by the various government departments and agencies for reasons of economy, reliability, etc.

(ii) State may engage in foreign trade to sell the surplus stock of goods procured by it as part of price support policy. -

(iii) In the centrally planned economies, state trading was essentially an inevitable part of the economic system.

(iv) In mixed economies, state trading in certain areas may be a part of the economic system.

(v) In some cases, state trading is a part of the entrepreneurial role played by the government in a mixed economy.

(vi) State trading in some commodities may be due to strategic reasons.

(vii) State trading may also be resorted to, to reap advantages of bulk buying and selling.

(viii) Another objective of state trading is to avoid unhealthy competition between domestic exporters.

(ix) Efficient regulation of foreign trade is also an important objective of state trading.

(x) Export market development is also an objective of state trading in several cases.

(xi) In case of some countries, like India, one of the objectives to state trading was expansion foreign trade with the socialist countries.

Posted Date: 3/13/2013 1:26:08 AM | Location : United States







Related Discussions:- Reasons for state trading, Assignment Help, Ask Question on Reasons for state trading, Get Answer, Expert's Help, Reasons for state trading Discussions

Write discussion on Reasons for state trading
Your posts are moderated
Related Questions
State trading is often associated with canalisation. Canalisation means estaolishment of state monomply in foreign trade. In other words, an item that is canalised can be imported

Sources of monopoly power: The main sources of monopoly power include the following: (i) Control of the entire supply of a basic input . It only one firm has access to or co

inflation and policies that are used to combat it


An economy can produce a maximum of either 28 million tons of wheat or 7,000 automobiles, or various intermediate quantities, as depicted in the table below:

what are the sources of monopoly power

illustrate and explain the changing demand gor big Mac using the indifference curves and budget line

What simplifying assumptions does the traditional macroeconomic model make (in addition to those made in the NIPA)?  The simplifying assumptions are:  1) The household and i

A 1500 word research paper on the economic, social or environmental effects of the widespread use of robots in factories (this meets Learning Outcome 4)