Course No:           Act 419

Course Name:      Economics - 3 International Trade & Finance

Course Description:      

Introduction:  The  scope  of  International  Trade;  Distinguishing  Features  of International Trade; Foreign Trade and National Interest.

The  Pure  Theories  of  International  Trade:  The  Mercantilists  Thesis  on International  Trade;  Trade  Based  on  Absolute  Advantage;  Trade  Based  on Comparative’s  Advantage;  The  opportunity  cost  theory;  P.P.F.  under  Constant cost.

The   Standard   Theories   -of   International   Trade:   Production   Function, Isoquants, Isocost, and Equilibrium; Production Theory with Two Nation,  Two Commodities & two Factors of Production; Derivation of the Edge worth Box’s Diagram  and  Production  Frontier;  Community  indifference  Curve;  The  Gains from  Trade  with  Increasing  Cost;  The  gains  from  Exchange  &  Gains  from Specialization; Trade based on Differences in Tastes.

Demand & Supply, Offer Curves, and Terms of Trade: The Equilibrium Relative Commodity Prices with Trade-Partial Equilibrium Analysis; Definition & derivation of Offer Curve; The Equilibrium Relative Commodity Prices with Trade-General Equilibrium Analysis; Definition of Measurement of Terms of Trade.

The Heckscher-Ohlin Model: Factor intensity; Factor Abundance: The Heckscher-Ohlin Theorem.

Economic Growth International Trade: Sources of Economic Growth; Classification of Technical Progress; The Effects of growth on Trade; lmmiserizing Growth.

The Commercial Policy: Types of Tariff; Effects of Tariff, Partial Equilibrium Analysis; Effects of Tariff-General Equilibrium Analysis

Foreign Exchange Market: Functions of Foreign Exchange Markets; Exchange Rates System; Foreign Exchange Risk, Hedging, and Speculation.

Balance of Payments: Definitions and Conventions; Balance of Payments Accounting; Balance of Payments Equilibrium

Course Review:

The course content gives an introduction to international financial environment, which includes a brief description to the scope and distinguishing features of international trade, foreign trade and national interest, the pure and standard theories of international trade, demand and supply, offer curves and terms of trade, the Hecksher-Ohlin Model, economic growth in international trade, the commercial policy, the Foreign Exchange market and balance of payments.