World economy is basically is the economy of the countries of the world. The economic development of these countries is measured through various standards of measurement. The economic development is some times measure in the form of world output and international trade in the world. These two frames are used as standard in measuring the economic development in the global world. World output is the quantity of output produced globally with in a given time frame. It can be used as a standard for global economic development in the world as more and more quantity of output produced in the world more it signifies the favorable environment of business and has the positive impact on international trade as well. Trade is also one of important aspects of the world economy as it provided the wide range of choices to different countries to enjoy the luxurious goods. Wide varieties of goods those are not available in the one own country may get traded from the other in order to enjoy the benefits from those products that are not available in these regions. So world output and international trade are interlinked and has very deep effects on a country economy as well.

Relationship between international trade and world output

International trade and world output is closely linked together. More and more global output produced, more the production of products increase, more healthy will be the business environment and as businesses of the world flourish more the production in different businesses increase which will implied positive impact on the output produced in a country that will ultimately increase the trend of international trade in the world. (Ethier, W. J.1982).

1-The close relationship between the trade and world out put can be seen in the case of recession when the spending power of the people will drop and the people will be more concerned about their financial future and less motivated to spend on domestic as well as international products related to import from other countries. The result will be lower the trade. Decrease in world out put reduces the international trade pattern in this way.