Answer to Question #253407 in Economics for Thanu

Question

1. What is International Economics?

2. What is the difference between international trade and international finance? (Give examples)

3. Explain what is pattern of trade, by giving examples.

4. What is Balance of payment?

Answer 1

1. International Economics is the study of economic interactions between countries. Broadly speaking, the field is split between the study of International Trade, which extends microeconomics to open economies, and International Finance, which employs macroeconomic analysis.
2. International finance is concerned with the "paper" or financial side of the global economy. Whereas international trade is the study of the flow of physical goods and services among nations, international finance is the study of the corresponding monetary flow used to pay for the physical trade.
3. The composition of a country's imports and exports, and the volume of its trade with the rest of the world is likely to change over a period of time.
4. The balance of payments (BOP), also known as the balance of international payments, is a statement of all transactions made between entities in one country and the rest of the world over a defined period, such as a quarter or a year. It summarizes all transactions that a country's individuals, companies, and government bodies complete with individuals, companies, and government bodies outside the country.