11. International economic issues
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11.1 Policies to correct disequilibrium in the balance of payments
11.1.1Balance of payments accounts
• Components of the balance of payments accounts: current account, financial account and capital account
11.1.2Policies and balance of payments
• Effect of fiscal, monetary, supply-side, protectionist and exchange rate policies on the balance of payments
11.1.3Switching vs reducing policies
• Difference between expenditure-switching and expenditure-reducing policies
11.2 Exchange rates
11.2.1Exchange rate measures
• Measurement of exchange rates: - distinction between nominal and real exchange rates - trade-weighted exchange rates
11.2.2Fixed/managed exchange rates
• Determination of exchange rates under fixed and managed systems
11.2.3Revaluation vs devaluation
• Distinction between revaluation and devaluation of a fixed exchange rate
11.2.4Exchange rate system changes
• Changes in the exchange rate under different exchange rate systems
11.2.5Marshall-Lerner and J-curve
• The effects of changing exchange rates on the external economy using Marshall-Lerner and J curve analysis
11.3 Economic development
11.3.1Development classification
• Classification of economies in terms of their level of development
11.3.2Income classification
• Classification of economies in terms of their level of national income
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
11.3.4Growth and living standards comparison
• Comparison of economic growth rates and living standards: - over time - between countries
11.4 Characteristics of countries at different levels of development
11.4.1Population growth and structure
• Population growth and structure: - measurement and causes of changes in birth rate, death rate, infant mortality and net migration - optimum population - level of urbanisation
11.4.2Income distribution
• Income distribution: - calculation of Gini coefficient and Lorenz curve analysis
11.4.3Economic structure
• Economic structure: - employment composition: primary, secondary and tertiary sectors - pattern of trade at different levels of development
11.5 Relationship between countries at different levels of development
11.5.1International aid
• International aid: - forms of aid - reasons for giving aid - effects of aid - importance of aid
11.5.2Trade and investment
• Trade and investment
11.5.3Multinational companies
• Role of multinational companies (MNCs): - definition of MNC - activities of MNCs - consequences of MNCs
11.5.4Foreign Direct Investment
• Foreign Direct Investment (FDI): - definition of FDI - consequences of FDI
11.5.5External debt
• External debt: - causes of debt - consequences of debt
11.5.6International Monetary Fund
• Role of the International Monetary Fund (IMF)
11.5.7World Bank
• Role of the World Bank
11.6 Globalisation
11.6.1Globalisation
• Meaning of globalisation and its causes and consequences
11.6.2Economic integration types
• Distinction between a free trade area, a customs union, a monetary union and full economic union
11.6.3Trade creation/diversion
• Trade creation and trade diversion