20809214International Economics
Course Information
Description
Introduction to International Economics examines issues in international trade and international finance and the interconnectedness of the worlds economies. Topics include the economic arguments for trade, current trade policies and practices, the effects of trade restrictions, free trade and fair trade, foreign exchange markets, and the role of international institutions such as the World Bank, the International Monetary Fund and the World Trade Organization. Current issues such as currency crises and free trade agreements will also be discussed.
Total Credits
3
Course Competencies
  1. Explain why specialization and trade increases output (income).
    Assessment Strategies
    by successfully completing a written quiz or exam that includes word, numerical and graph questions.
    Criteria
    explanation of the increase in output from specialization and trade
    appropriate calculations of the increase in output from specialization and trade
    relevant applications of of the increase in output from specialization and trade
    definition of absolute and comparative advantage
    appropriate calculations of absolute and comparative advantage
    relevant applications of absolute and comparative advantage
    explanation of production possibilities with and without trade
    appropriate calculation and graphing of production possibilities with and without trade
    relevant applications of production possibilities with and without trade
    explanation of the Heckscher-Ohlin theory
    appropriate calculations demonstrating the Heckscher-Ohlin theory
    relevant application of the Heckscher-Ohlin theory

  2. Analyze the effects of international trade on trading partners.
    Assessment Strategies
    by successfully completing a written quiz or exam that includes word, numerical and graph questions.
    Criteria
    explanation of the effects of trade on input and output markets in importing and exporting economies
    appropriate calculations of the effects of trade on input and output markets in importing and exporting economies
    relevant applications of the effects of trade on input and output markets in importing and exporting economies
    explanation of the Stolper-Samuelson theorem
    appropriate calculations using the Stolper-Samuelson theorem
    relevant applications of the Stolper-Samuelson theorem
    explanation of the relationship between industry structure and trade
    relevant applications of the relationship between industry structure and trade
    definition of the terms of trade
    appropriate calculations of the terms of trade
    relevant applications of the terms of trade
    explanation of the relationship between trade and economic growth
    relevant applications of the relationship between grade and economic growth

  3. Evaluate the effects of tariffs and other trade barriers.
    Assessment Strategies
    by successfully completing a written quiz or exam that includes word, numerical and graph questions.
    Criteria
    definition of tariffs
    appropriate calculation of tariffs
    explanation of the effects of tariffs on producers and consumers in exporting and importing countries
    appropriate calculations of the effects of tariffs on producers and consumers in exporting and importing countries
    relevant applications of the effects of tariffs on producers and consumers in exporting and importing countries
    definition of quotas
    explanation of the effects of quotas on producers and consumers in exporting and importing countries
    definition of voluntary export restraints
    explanation of the effects of voluntary export restraints on producers and consumers in exporting and importing countries
    definition of domestic content requirements
    explanation of the effects of voluntary export restraints on producers and consumers in exporting and importing countries
    definition of consumer surplus and producer surplus
    appropriate calculations or graphing of consumer surplus and producer surplus
    relevant applications of the concepts of consumer surplus and producer surplus
    definition of deadweight loss
    appropriate calculations or graphing of deadweight loss
    relevant applications of the concept of deadweight loss

  4. Summarize the role of major international economic institutions such as the World Bank, the International Monetary Fund and the World Trade Organization.
    Assessment Strategies
    by successfully completing a written quiz or exam that includes word, numerical and graph questions.
    Criteria
    definition of the World Trade Organization
    explanation of the major functions of the World Trade Organization
    definition of dumping
    explanation of the effects of dumping on producers and consumers in exporting and importing countries
    definition of export subsidies
    explanation of the effects of export subsidies on producers and consumers in exporting and importing countries
    definition of countervailing duties
    explanation of the effects of countervailing duties on producers and consumers in exporting and importing countries
    relevant applications of the concepts of consumer surplus and producer surplus
    definition of the World Bank
    explanation of the major functions of the World Bank
    definition of the International Monetary Fund
    explanation of the major functions of the International Monetary Fund, including relevant examples

  5. Explain the relationship between a country's trade position and the international flow of funds.
    Assessment Strategies
    by successfully completing a written quiz or exam that includes word, numerical and graph questions.
    Criteria
    definition of the balance of payments
    appropriate calculations of the balance of payments
    definition of the current account
    appropriate calculations of the current account
    definition of the capital account
    appropriate calculations of the capital account
    discussion of the implications of trade balance for the international flow of funds

  6. Explain the major factors affecting currency exchange rates.
    Assessment Strategies
    by successfully completing a written quiz or exam that includes word, numerical and graph questions.
    Criteria
    exchange rates
    spot rates
    forward rates
    the major determinants of demand for a foreign currency
    the major determinants of supply of a foreign currency
    the impact of a change in demand or supply of a foreign currency on the price of the foreign currency
    exchange rate risk
    hedging
    speculation
    arbitrage
    triangular arbitrage
    covered interest differential
    covered interest arbitrage
    expected uncovered interest differential
    forward premium
    the role of domestic and foreign interest rates in the exchange markets
    purchasing power parity
    the role of purchasing power parity in determining long-run exchange rates
    fixed exchange rates
    exchange controls
    capital controls
    how governments maintain fixed exchange rates
    managed float
    dirty float
    adjustable peg
    crawling peg
    sterilization
    sterilized intervention
    gold standard
    the Bretton Woods system and why it collapsed
    applying foreign exchange concepts to relevant current events

  7. Determine the macroeconomic effects of current or historical events in an open economy.
    Assessment Strategies
    by successfully completing a written quiz or exam that includes word, numerical and graph questions.
    Criteria
    aggregate demand
    the major determinants of aggregate demand
    equilibrium GDP when exports depend on foreign income and imports depend on domestic income
    the difference between the spending multiplier in a closed economy and that in an open economy
    macroeconomic equilibrium in terms of the domestic product market, the money market and the foreign exchange market
    equilibrium in the domestic product market
    equilibrium in the money market
    equilibrium in the foreign exchange market
    macroeconomic equilibrium output, interest rates, and exchange rates when all three markets are in equilibrium
    the implications of current or historical events on a country's macroeconomic position
    the effects of fiscal policy in an open economy
    the effects of mionetary policy in an open economy with floating exchange rates
    the effects of monetary policy in an open economy with fixed exchange rates