MEC-007: INTERNATIONAL TRADE AND FINANCE
 
Section-A
Answer the following questions in about 700 words each. Each question carries 20 marks. 2X20=40
1. Critically discuss the Ricardian theory of Comparative Advantage. How is it different from Adam Smith’s theory of Absolute Advantage?
2. Explain the various concepts of terms of trade. Critically examine the behavior of terms of trade as explained by Prebisch.
 
Section B
Answer the following questions in about 400 words each. Each question carries 12marks. 5X12=60
3. Explain multilateral framework of international trade. Explain its main features.
4. What are the various forms of economic integration? How is trade diversion different from trade creation? Elucidate.
5. Describe the evolution of international monetary system. Examine the trends in the international monetary and financial systems.
6. Discuss the various instruments of trade protection. Differentiate between quotas and tariffs.
7. Critically examine the relative merits and demerits of the fixed and flexible exchange rates.