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11. International economic issues

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  1. 11.1 Policies to correct disequilibrium in the balance of payments

    1. • Components of the balance of payments accounts: current account, financial account and capital account

    2. • Effect of fiscal, monetary, supply-side, protectionist and exchange rate policies on the balance of payments

    3. • Difference between expenditure-switching and expenditure-reducing policies

  2. 11.2 Exchange rates

    1. • Measurement of exchange rates: - distinction between nominal and real exchange rates - trade-weighted exchange rates

    2. • Determination of exchange rates under fixed and managed systems

    3. • Distinction between revaluation and devaluation of a fixed exchange rate

    4. • Changes in the exchange rate under different exchange rate systems

    5. • The effects of changing exchange rates on the external economy using Marshall-Lerner and J curve analysis

  3. 11.3 Economic development

    1. 11.3.1Development classification

      • Classification of economies in terms of their level of development

    2. 11.3.2Income classification

      • Classification of economies in terms of their level of national income

    3. 11.3.3Living standards/development indicators

      • Indicators of living standards and economic development: - monetary indicators including real per capita national income statistics (GDP, GNI, NNI) and purchasing power parity - issues of comparison using monetary indicators - non-monetary indicators - composite indicators: - Human Development Index (HDI) - Measure of Economic Welfare (MEW) - Multidimensional Poverty Index (MPI) - the Kuznets curve

    4. 11.3.4Growth and living standards comparison

      • Comparison of economic growth rates and living standards: - over time - between countries

  4. 11.4 Characteristics of countries at different levels of development

    1. • Population growth and structure: - measurement and causes of changes in birth rate, death rate, infant mortality and net migration - optimum population - level of urbanisation

    2. • Income distribution: - calculation of Gini coefficient and Lorenz curve analysis

    3. • Economic structure: - employment composition: primary, secondary and tertiary sectors - pattern of trade at different levels of development

  5. 11.5 Relationship between countries at different levels of development

    1. • International aid: - forms of aid - reasons for giving aid - effects of aid - importance of aid

    2. • Trade and investment

    3. • Role of multinational companies (MNCs): - definition of MNC - activities of MNCs - consequences of MNCs

    4. • Foreign Direct Investment (FDI): - definition of FDI - consequences of FDI

    5. • External debt: - causes of debt - consequences of debt

    6. • Role of the International Monetary Fund (IMF)

    7. • Role of the World Bank

  6. 11.6 Globalisation

    1. • Meaning of globalisation and its causes and consequences

    2. • Distinction between a free trade area, a customs union, a monetary union and full economic union

    3. • Trade creation and trade diversion