The US Importation Benefits for World Development Term Paper

The US Importation Benefits for World Development - Term Paper Example Countries trade with each other because of the concept of comparative advantage and specialization.   Using the concept of Adams Smith as the basis of the theory it would not able to remember the foundation of having to import or to buy when it would cost more to make. If a foreign country can supply the United States with a commodity which would be cheaper than it can make, then there is a reason to buy from said foreign while at the same time allowing some of the produce of the US industry to be sold. In other words, the US would produce where it has some advantage. The need to specialize and trade for the same reason should govern the behavior of individuals at it meant to result in greater out and income.   A lawyer who is also a skilled painter can benefit to just hire a painter to paint his house. It is assumed that the lawyer can earn $50 dollars per hour and that the painter earns $20 an hour. Although the lawyer is a good painter, he would do best to just specialize in his work as a lawyer by hiring a painted, as he could be saving $20 per hour. That the world economy is benefited by US importation cannot be denied.   Ã‚  One cannot talk about the economy without going back to things about demand and supply of good and services. The demanders are the households, individuals, and entities and the suppliers are the firms. This interaction could result in economic activities that will the cause the continuous production of needs and wants as sustained by the continuing demand.   From the macroeconomic model, the economy of every country is then measured by GDP growth with the necessary components of consumption, investment, government spending, and net export or the result of exports after deducting imports. Imports by the US may result therefore to trade deficit whether the US could actually be consuming more than it produces or exports. It may there have a negative effect on its GDP. However, in business, one’s loss is another’s gain.