The basic of international trade- the Absolute Advantage Theory – Comparative advantage Theory of Opportunity Cost.
– Gains from trade as explained by a comparison of production and Consumption Possibilities Frontiers under different international prices.
– The Heckscher – Ohlin Trade Model – Relationship between factor richness and specialization in production – Factor intensities of imports and exports as expected on the basis of relative availability of the factors of production – the Leontief Paradox.
– Factor price equalization between trading countries under conditions of partial and complete specialization in production.
– The offer curve-import-export possibilities as expressed through offer curves and the determination of international equilibrium through the use of offer curves.
– Terms of Trade-Conceptual Issues-Trends in terms of trade experienced by developed industrialized countries and the less developed agricultural countries.
– The strategy of import substitution, as against the strategy of export promotion, for the attainment of development by less developed countries.
– The theory of protection – Tariffs in a partial equilibrium setting – Impact of tariff on domestic production, prices, imports and consumption – Effect of tariffs on income distribution – Tariffs – and Terms of Trade.
– Preferential trading arrangements among countries. Various types of integration – the theory of Customs Union, static and dynamic effects – trade creation and trade diversion – Rationale for regional trade agreements among developing countries.
– Balance of payments and financial issues – elements in the current account – balance of payments on current account – elements in the capital account – autonomous transactions – deficit and surplus in current account – accommodating transactions and the overall balance.
– Foreign trade and national income.
– Market for Foreign Exchange – Demand and Supply of foreign exchange – fixed and flexible exchange rates.
– Trade in health services