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International trade:
International trade refers to the exchange of goods and services between countries. Goods sold to other countries are referred to as exports and goods bought from them are dubbed as imports. International trade also involves movement of capital between countries.The bottom line for the existence of international trade is differences in cost of production across countries. Balance of payments is an account that summarizes a country’s total payments and total receipts from international economic transactions within a specific period usually one year.
The foreign exchange market is an organizational setting within which individuals, business firms, banks etc buy and sell foreign currency, It has no centralised meeting place and not limited to one country.
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