Role of Service in the Economic of Nations & World Commerce

Role of Service in the Economic of Nations & World Commerce

A service is the non-ownership matching of a product. Service provision has been characterised as a financial undertaking that does not outcome in ownership and is asserted to be a method that conceives advantages by facilitating either a change in consumers, a change in their personal possessions, or a alter in their vague assets. Historically, economics has posited that economic activity occurs when humans engage in a transaction that involves the exchange of goods and/or services between parties (Buckley, 2003). This interpretation of economic activity was adequate when the human population was low and its economic activity had only a limited impact on nature. However, modernization and technology has led people to engage in economic activity in greater numbers that has led to the destruction of vast areas in nature.

Since the 1970s, economic theories have arisen that emphasize that the nature of economic costs comes with direct and indirect consequences. Therefore, to preserve the biological diversity of the earth, and to promote economic equity alternatives, economic theories and approaches have been developed, which seek to make biodiversity central to economic activity. (Sutherland and Canwell, 2004)

For all humans, the exchange of scarce resources, both renewable and nonrenewable, is necessary for the development and maintenance of life. Nonrenewable resources include minerals and petroleum, which cannot be reproduced once consumed. However, where there may be no other resources, substitutes may be used if costs of extraction and processing are acceptable to consumers in the market; for example, diamonds and oil can be synthesised. (Salvatore, 2001)

Modern wartime economies have usually been command economies. In modern times, socialist and Communist economies have been economies that have sought to establish economic justice by their power to control the production, distribution, and consumption of goods and services, and by means of “equitable” distribution of what is produced. However, all too often, socialist and Communist economies have been unsuccessful in producing goods and services as well as achieving their moral principle of equality of distribution (Buckley, 2003). This moral failure has often been due to directing the production of luxuries to political forces.

However, the emergence of capitalism and accompanying industrialization and advanced transportation greatly increased the economic, social, and political importance of international trade. There are many reasons why trade occurs between countries, among which are differences in technology, resource endowments, internal demand for goods and services, and existence of economies of scale in production. In sum the exchange takes place because of the differences in costs of production between the countries, and because it increases the economic well-being of each country.

Similarly there are several principal theories that attempt to explain international trade. Mercantilist theory, or mercantilism, asserted that a country should try to achieve a favourable balance of trade (export more than it imports), since this would increase the amount of gold in the surplus country. In order to achieve that, mercantilists advocated strict government control of all ...