LESSON – 7 INTERNATIONAL ECONOMICS

Transcript:LESSON – 7 INTERNATIONAL ECONOMICS:
LESSON – 7 INTERNATIONAL ECONOMICS www.Padasalai.Net J.SANGEETHA NATIONAL MODEL MATRIC HSS PEELAMEDU COIMBATORE MEANING EXCHANGE OF GOODS AND SERVICES BETWEEN TWO OR MORE COUNTRIES SUBJECT MATTERS OF INTERNATIONAL ECONOMICS PURE THEORY OF TRADE POLICY ISSUES INTERNATIONAL CARTELS AND TRADE BLOCS INTERNATIONAL FINANCIAL AND REGULATORY INSTITUTION PURE THEORY OF TRADE causes for foreign trade, composition, direction and volume of trade, determination of the terms of trade and exchange rate, issues related to balance of trade and balance of payments. POLICY ISSUES free trade vs. protection, methods of regulating trade, capital and technology flows, use of taxation, subsidies and dumping, exchange control and convertibility, foreign aid, external borrowings and foreign direct investment, measures of correcting disequilibrium in the balance of payments etc are covered INTERNATIONAL CARTELS AND TRADE BLOCS economic integration in the form of international cartels, customs unions, monetary unions, trade blocs, economic unions operation of Multi National Corporations (MNCs). INTERNATIONAL FINANCIAL AND TRADE REGULATORY INSTITUTIONS IMF - International Monetary Fund . IBRD - Industrial Bank for Reconstruction and Development. WTO - World Trade Organisation. which influence international economic transactions and relations MEANING OF TRADE EXCHANGE OF GOODS AMONG PEOPLE & COUNTRIES TYPES OF TRADE INTERNAL TRADE INTERNATIONAL TRADE EXCHANE OF GOODS WITHIN POLITICAL & GEOGRAPHICAL BOUNDRIES OF A NATION EXCHANGE OF GOODS AND SERVICES BETWEEN TWO OR MORE COUNTRIES DIFFERENCES INTERNAL BETWEEN SAME NATION LABOUR AND CAPITAL MOVE FREE. FREE FLOW OF GOODS COMMON CURRECNY PHISICAL & GEOGRAOHICAL CONDITION SIMILAR SAME FINANCIAL REGULATIONS. NO DIFFERENCE IN CUSTOMS AND TRADITIONS. INTERNATIONAL 1.BETWEEN DIFFERENT COUNTRIES 2.LABOUR & CAPITAL DONOT MOVE FREE. 3.NOT EASY MOVEMENT 4.DIFFERENT CURRENCY 5.DIFFERENT GEOGRAPHICAL CONDITIONS 6.DIFFERENT FINANCIAL REGULATIONS. 7.DIFFERENCE IN CUSTOMS AND TRADITIONS. THEORIES OF INTERNATIONAL TRADE ADAM SMITH’S THEORY OF ABSOLUTE COST ADVANTAGE RICARDO’S THEORY OF COMPARATIVE COST ADVANTAGE MODERN THEORY OF INTERNATIONAL TRADE ADAM SMITH’S THEORY OF ABSOLUTE COST ADVANTAGE ALL NATIONS CAN BE BENIFITTED. TRADE BETWEEN 2 COUNTRIES ARE MUTUALLY BENEFIAL OVER ONE COUNTRIES COMMODITY WITH OTHER. GRAPH AND EXPLANATION RICARDO’S THEORY OF COMPARATIVE COST ADVANTAGE A COUNTRY CAN GAIN FROM WHEN IT PRODUCES AT RELATIVELY LOWER COST. *EVEN WHEN A COUNTRY ENJOYS ABSOLUTE ADVANTAGE IN BOTH GOODS, THE COUNTRY WOULD SEPCIALISE IN THE PRODUCTION AND EXPORT OF THOSE GOODS WHICH ARE RELATIVELY MORE ADVANTAGES. GRAPH AND EXPLANATION MODERN THEORY OF INTERNATIONAL TRADE DEVELOPED BY SWEDISH ECONOMIST ELI – HECKSCHER AND HIS STUDENT BERTIL OHLIN IN 1919. ALSO CALLED AS FACTOR ENDOWMENT THEORY. MODERN THEORY