International Economics

·         Inter-regional and international trade

·         Theories of international trade – Mercantilism, Theory of absolute advantage, Theory of comparative advantage and Opportunity cost theory (constant and increasing opportunity costs case)

·         Empirical tests of Ricardian Model

·         Offer Curves – Meaning; General Equilibrium Analysis- Equilibrium Relative Commodity Prices with trade

·         Terms of trade: Definition & various concepts

·         Heckscher - Ohlin Theory

         Empirical tests of H-O model & Leontief Paradox

·         Free Trade versus Protectionism

·         Tariff – Meaning, Classification, Partial & General Equilibrium analysis, Stolper Samuelson theorem, Rate of effective protection, Optimum tariff

·         Quotas – types and effects

·         Import Quota versus Import Tariff

·         Other non tariff barriers; New Protectionism – Strategic Trade Policy; Economic Integration – Various forms; Trade Creating and Trade Diverting Customs Union; Static and Dynamic Effects of Customs Union

·         Foreign Exchange Market – functions

·         Foreign Exchange Transactions - Concepts of Arbitrage, Spot and Forward Rates; Futures; Options; Foreign Exchange Risks; Hedging and Speculation

·         Foreign Exchange Rate – meaning

·         Exchange Rate Regimes – Fixed, Flexible, Managed Floating

Foreign Exchange Control – Meaning, Objectives and Methods

·         Balance of Payments – Components

·         Disequilibrium in Balance of Payments – Causes

·         Measures to correct disequilibrium in the Balance of Payments

·         Devaluation- Meaning and limitations

·         Elasticities Approach and Income Absorption Approach to devaluation

·         The J curve effect

·         Foreign Trade Multiplier