Tuesday, March 24, 2009

the world of international economics (3)

The study of international economics ,like all branches of economics,concerns decision making with respect to the use of scarce resources to meet desired economic objectives .it examines how international transaction influence such things as social welfare,income distribution ,employment,growth,and price stability and the possible ways public policy can effect the outcomes.in the study of international trade ,we ask ,for example :what determines the basis for trade?what factors impede trade flows? what is the impact of public policy that attempts to alter the pattern of trade? in the study of international monetary economics we address question such as :what is meant by a country is balance of payments ?how are exchange rates determined ? how does trade affect the economy at the macro level? Why does financial capital flow rapidly and sizabley across country border? should several countries adopt a common currency? how do international transactions affect the use of monetary and fiscal policy to pursue domestic targets?

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