TA 20

FIFTH SEMESTER – November 2008

EC 5501 – INTERNATIONAL ECONOMICS

Date : 05-11-08 Dept. No. Max. : 100 Marks

Time : 9:00 – 12:00

Part – A

Answer any FIVE questions in not exceeding 75 words (5*4 = 20 marks)

Explain the interdependence of Internal and International Trade.
What are the assumptions of the Theory of Comparative Costs?
What is meant by Exchange Control? Why is it essential?
What is ‘Gains from Trade’ according to Classical Economists?
Define and explain the term International Liquidity.
Bring out the meaning of Current account.
What is WTO? How was it formed?

Part – B

Answer any FOUR questions in not exceeding 300 words (4 *10 = 40 marks)

Explain Adam Smith’s theory of Absolute Cost Advantage and bring out its defects.
Explain the cause of deterioration in terms of trade of under developed countries.
Explain the adjustable peg system. Bring out its defects.
Make a critical appraisal of the SDR scheme.
What is meant by ‘Single Factoral Terms of Trade’ and ‘Double Factoral Terms of Trade’?

Discuss the role played by Asian Development Bank in financing India’s economic development.

What main benefits can India hope to derive from the convertible rupee system? Indicate the conditions of success of such a system.

Part – C

Answer any TWO questions in not exceeding 900 words (2 *20 = 40 marks)

Discuss the superiority of Hecksher Ohlin Theory over Classical theory of International Trade.

Explain the purchasing power parity theory. What are the criticisms leveled against this theory?

Examine the role of IMF in relation to LDCs. Trace the benefits extended to India by the IMF.

What policy measures have been adopted by the Indian Government to promote exports in the country? Comment on the progress made towards export expansion.

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