MEANING & INTRODUCTIONN TO INTERNATIONAL ECONOMICS

1. INTERNATIONAL
ECONOMICS

2. UNIT-I
INTRODUCTION TO INTERNATIONAL ECONOMICS

3. LEARNING OUTCOMES
• Concept of Trade
• Types of trade: Internal and International trade.
• Importance of International trade
• Inter-Regional Vs International trade

4. CONCEPT OF TRADE
• Trade involves transfer of goods or services to another in exchange of money.
• All of us trade regularly.
• Origin of trade was the Barter system
• Modern trade is through medium of exchange i.e money

5. WHEN DOES A NATION EXPORT
AND IMPORT?
• Export means selling goods and services out of the country.
• Only when domestic demand is satisfied and still surplus output
is left.......a nation EXPORTS.
• Imports means goods and services flowing into the country.
• When a nation does not have enough resources or capacity to
meet domestic demand.....the nation IMPORTS.

6. TYPES OF TRADE
• Internal / Inter-regional / Domestic Trade
• International / Foriegn Trade
• Discuss the difference between internal and international trade.

7. INTERNAL V/S INTERNATIONAL TRADE
Basis of Difference Internal Trade International Trade
Geographical coverage Confined within the boundries
of a country
Carried across the boundaries
of a country
Language used Local or native language Foreign language
Nationality of parties (buyer &
seller)
Belong to same country Belong to different countries
Usual mode of transportation Roadways & railways Shipping & airlines
Documents and formalities
involved
few More or many
Currency for payment Local currency Foreign currency
Government restrictions Few restrictions Restrictions such as tariffs,
quotas etc
Mobility of FOP Mobile within the country Immobile from one country to
another
Degree of Competition No competition Severe competition

8. ROLE & IMPORTANCE
• Vent for Surplus
• Efficient International allocation of resources
• Optimization of Production
• Widens the market
• Innovation
• Educative Effect

9. IMPORTANT QUESTIONS
1) Explain in detail the importance of International Economics
2) Discuss the scope of International Economics
3) Discuss the fundamental differences between inter-regional and international
trade