The document provides a review of topics that will be covered on the final exam for an international business course. The exam will be 50 multiple choice questions over 3 hours, covering all material from Lecture 5 onwards and accounting for 50% of the final grade. Key topics that will be on the exam include: international trade theories like comparative advantage and Heckscher-Ohlin model; sources of economic growth; types of foreign investment; instruments and impact of trade policies; foreign exchange markets; monetary and portfolio approaches; and macroeconomic policy in open economies.

1. Lecture 12 – Final Exam ReviewOctober 4th, 2010http://www.slideshare.net/saark/ibe303-lecture-12

2. Final ExamType: Multiple choiceNo. of questions: 50Duration: 3 hoursGrade: 50% of final gradeTopics:Everything after midterm (from Lecture 5 onward)

3. International TradeFactor EndowmentsHeckscher-Ohlin ModelModel assumptionsCaptial-Labor ratioRelative Factor EndowmentsFactor PricesTrade in Neoclassical ModelStolper-Samuelson Theorem

4. Post-Hecscher-Ohlin Theories of TradePosner’s Imitation Lag HypothesisProduct Cycle ModelVertical SpecilizationFirm-focused TheoriesThe Linder TheoryThe Krugman Model

5. Intra-Industry TradeCauses of intra-industry trade

6. Economic Growth and International TradeTrade effects of growthProduction GrowthConsumption GrowthSources of GrowthFactor GrowthFactor-neutralGrowth in KGrowth in LCasesSmall countryLarge country

7. International Factor MovementTypes of capital foreign investmentForeign Direct Investment (FDI) Foreign Portfolio Investment (FPI)Market equilibrium

8. The Instruments of Trade PolicyTariff

9. The Impact of Trade PoliciesConsumer SurplusProducer SurplusTrade RestrictionsPartial equilibriumSmall / Large country caseGeneral equilibriumSmall / Large country caseArguments for Interventionist Trade PoliciesStrategic Trade Policy

10. Balance of PaymentGrowth of TradeCapital MovementsBOP accounting

11. Foreign ExchangeMarket for Foreign ExchangeDemandSupplySpot MarketArbitrageAbsolute/Relative PPPForward MarketHedging

12. Foreign Exchange and Financial MarketLink between Foreign Exchange and Financial MarketsFinancial and Exchange rate adjustmentsThe Eurodollar marketInternational Bond MarketInternational Stock MarketDerivativesExchange Rate Overshooting

13. Monetary And Portfolio Balance ApproachesMonetary ApproachBOPMoney supplyMoney demandMonetary equilibriumExchange ratePortfolio ApproachBOPMoney supplyMoney demandMonetary equilibriumExchange rate

14. Price Adjustments and Balance-of-Payments DisequilibriumPrice Adjustment mechanismCurrent Account under flexible rateDemand and Supply of foreign exchangeThe Marshall-Lerner Condition

15. Current Account and National IncomeKeynesian Income ModelPrice and Income Adjustments Internal and External Balance

16. Economic PolicyOpen economy under fixed exchange rateMoney market equilibriumReal Sector equilibriumBOP equilibriumFiscal policyMonetary policyOpen economy under flexible exchange rateFiscal policyMonetary policyEffects of shocks