The study of the interaction between countries based on each respective country’s demand and supply is known as International economics
International economics is a branch of economics that studies the effects of international commerce, investment, and borrowing and lending.
The average tariff rate is one approach for determining the degree of protectionism in a given economy. Because tariffs reduce foreign product imports, the higher the tariff, the more protection given to the country’s import-competing businesses. Tariffs were, at one point, arguably the most widely used trade policy. Tariffs were a major source of revenue for many countries’ government budgets. But as trade liberalisation progressed in the second half of the twentieth century, numerous types of nontariff obstacles emerged.
A transitory increase in the money supply that has no effect on the long-run predicted exchange rate causes the currency to depreciate and output to grow. Temporary fiscal expansion increases output while simultaneously causing the currency to appreciate.
The government can utilise monetary and fiscal policy to mitigate the consequences of output and employment disruptions.
International Economics has also created numerous free trade zones to conduct business. For example, NAFTA, SAARC, European Unions etc.