Relation between Trade & World Output Assignment Help

World output can be defined as the total amount of output produced by the individual countries in the world. For example if each country in the world produces equal amount such as 5 machines the world output would be equal to 5 multiply by number of countries. Trade can be defined as the transaction between two countries. The trade between two countries mainly based on their specialization. As if one country is more proficient in manufacturing automobile then it will forgo the manufacturing of other products and will produce automobiles to achieve specialization. There is a positive relationship between the trade output and world output. The relationship between the trade and world output is similar to the relationship of supply and demand. The increase in trade due to specialization would cause an increase in the total output or in world output.  On the other hand, if the world output is lower for a particular year then the trade output for that year would also be lower. The amount of world output always influences to the international trade as it can be seen in the change in the position of economy. The increase in the economic output causes an increase in the international trade. During the economic recession trade can remain slow as consumers are more concern for their financial futures (Pagell & Halperin, 2000). At the same time it also causes a decrease in the world output because of the increase in cost and people will also purchases less in concern to their financial futures. The volume of trade increases significant with the increase in world output as more production by the countries causes an increase in their specialization and they trade it from other countries in order to increase their profits and market share. International trade increases with a faster rate in comparison of the world output as traded goods relatively cheaper than the goods, which are not traded. Get economics and business assignment help from US and Australia assignment writing experts.