What is international trade?

International trade refers to the exchange of goods and services between countries, which allows nations to access products that are not readily available or are produced more efficiently elsewhere. This process enhances economic interdependence and opens up markets for both importing and exporting nations, fostering competition and innovation by exposing domestic producers to foreign competitors.

Engaging in international trade enables countries to specialize in the production of certain goods and services, leading to greater overall efficiency. For instance, one nation may have a climate perfect for coffee production, while another country may excel in manufacturing technology. By trading, both countries can benefit from each other's strengths.

The other options do not accurately define international trade. The first option pertains only to trade within a single nation, while the third option focuses on domestic production rather than exchanges with other nations. The fourth option refers to the regulatory framework surrounding trade, rather than the act of trading itself. Thus, the correct understanding of international trade emphasizes the cross-border exchange of goods and services.