The goods and services produced by one country which are sold to another in exchange for the second country's own goods and services, for gold and foreign exchange or in settlement of debt

The goods and services produced by one country which are sold to another in exchange for the second country?s own goods and services, for gold and foreign exchange or in settlement of debt. Countries tend to specialize in the production of those goods and services in which they can be relatively most efficient, because of their indigenous factor endowments.

Countries devote home resources to exports because they can obtain more goods and services by international exchange than they would obtain from the same resources devoted to direct home production. About 20 per cent of the U.K. domestic production is exported, compared with about 13 per cent for the world as a whole.