Course

20809214 International Economics
Course Information
Description
This course examines topics in international trade and international finance and the interconnectedness of the world’s economies. It examines economic arguments for trade, current trade policies and practices, the effects of trade restrictions, free 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. Currency crises and free trade agreements will also be discussed.
Total Credits
3
Course Competencies
  1. Explain why nations trade
    Assessment Strategies
    Oral, written, and/or graphic assessment
    Criteria
    Define international trade and globalization
    Describe the history of international trade
    Analyze the economic rationale for international trade
    Explain some fallacies of international trade
    Examine arguments for and against international trade
    Define absolute and comparative advantage
    Distinguish between absolute and comparative advantage using numerical examples

  2. Explain why specialization and trade increases output (income)
    Assessment Strategies
    Oral, written, and/or graphic assessment
    Criteria
    Calculate the increase in output from specialization and trade
    Explain the increase in output from specialization and trade
    Explain the production possibilities with and without trade
    Graph the production possibilities curve with and without trade
    Describe the Heckscher-Ohlin (Factor Endowment) theory
    Discuss trade patterns using the Heckscher-Ohlin theory
    Perform appropriate calculations demonstrating the Heckscher-Ohlin theory
    Analyze various sources of comparative advantage

  3. Analyze the effects of international trade on trading partners
    Assessment Strategies
    Oral, written, and/or graphic assessment
    Criteria
    Explain the effects of trade on input and output markets in importing and exporting economies
    Calculate the effects of trade on input and output markets in importing and exporting economies
    Explain the Stolper-Samuelson theorem using examples
    Discuss the relationship between industry structure and trade
    Explain trade using additional trade theories such as overlapping demand theory
    Define terms of trade
    Use numerical examples to explain terms of trade
    Explain the relationship between trade and economic growth

  4. Evaluate the effects of tariffs
    Assessment Strategies
    Oral, written, and/or graphic assessment
    Criteria
    Define tariffs
    Distinguish between the different types of tariffs using numerical examples
    Explain the effects of tariffs on producers and consumers in importing and exporting countries
    Calculate the effects of tariffs on producers and consumers in importing and exporting countries
    Define consumer surplus, producer surplus, and deadweight loss
    Calculate and graph consumer surplus, producer surplus, and deadweight loss
    Use consumer surplus and producer surplus to illustrate the welfare effects of tariffs
    Analyze the welfare effects of tariffs on small versus large nations

  5. Evaluate the effects of non-tariff trade barriers
    Assessment Strategies
    Oral, written, and/or graphic assessment
    Criteria
    Define various non-tariff trade barriers such as quotas, subsidies, voluntary export restraints, domestic content requirements, dumping, countervailing duties, industrial policies, …
    Discuss specific examples of non-tariff trade barriers
    Explain the effects of non-tariff trade barriers on producers and consumers in exporting and importing countries
    Use numbers and graphs to explain the welfare effects of non-tariff trade barriers

  6. Summarize the role of major international economic institutions such as the World Trade Organization, the World Bank, and the International Monetary Fund
    Assessment Strategies
    Oral, written, and/or graphic assessment
    Criteria
    Define major international economic institutions such as the World Trade Organization, the World Bank, and the International Monetary Fund
    Summarize the history behind the creation of the major international economic institutions
    Explain major functions of international economic institutions including relevant examples

  7. Explain the role of regional trade agreement in international trade
    Assessment Strategies
    Oral, written, and/or graphic assessment
    Criteria
    Define regional trade agreements
    Provide relevant examples of regional trade agreements
    Distinguish between different types of regional trade agreements
    Use numerical or graphical examples to explain the welfare effects of regional trade agreements
    Explain the differences between static and dynamic welfare effects of a regional trade agreement
    Use a graph to illustrate the areas represented by trade creation and trade diversion under a regional trade agreement

  8. Explain the relationship between a country's trade position and the international flow of funds
    Assessment Strategies
    Oral, written, and/or graphic assessment
    Criteria
    Define the balance of payments of a nation
    Use numerical examples to show the components of the balance of payments of a nation
    Distinguish between credit or debit items on the balance of payment of a nation
    Define current and capital accounts
    Use appropriate examples and calculations to explain components of current and capital accounts
    Discuss the implications of trade balance for the international flow of funds

  9. Explain the major factors affecting currency exchange rates
    Assessment Strategies
    Oral, written, and/or graphic assessment
    Criteria
    Define foreign exchange rates
    Describe the different types of exchange rates
    Explain the major determinants of demand and supply of a foreign currency
    Discuss the impact of a change in demand or supply of a foreign currency on the price of the foreign currency
    Describe different ways banks, companies, or individuals try to profit from foreign exchange markets
    Describe different ways to manage foreign exchange risk
    Summarize the role of domestic and foreign interest rates in the exchange markets
    Define purchasing power parity
    Explain the role of purchasing power parity in determining long-run exchange rates
    Describe the different types of exchange rate systems
    Explain how governments maintain fixed exchange rates
    Discuss the Bretton Woods system and why it collapsed
    Apply foreign exchange concepts to relevant current events
    Discuss currency crises using relevant examples

  10. Determine the macroeconomic effects of current and historical events in an open economy
    Assessment Strategies
    Oral, written, and/or graphic assessment
    Criteria
    Define aggregate demand and aggregate supply
    Review the major determinants of aggregate demand and aggregate supply
    Analyze the macroeconomic equilibrium in terms of the domestic product market, the money market, and the foreign exchange market
    Explain the macroeconomic equilibrium output, interest rates, and exchange rates when all three markets are in equilibrium
    Discuss the implications of current and historical events on a country's macroeconomic position
    Examine the effects of fiscal policy and monetary policy in an open economy
    Examine the effects of fiscal policy and monetary policy in an open economy with floating exchange rates
    Examine the effects of fiscal policy and monetary policy in an open economy with fixed exchange rates