Author: Prashant Pandey

Important Question Bank and Paper pattern Q1 A) Fill in the blanksB) True or falseQ2 Any 2 (15 marks -7.5 marks for each question)A) David Ricardo theory/ Heckscher- Ohlin Theory (both with assumption and limitation)B) Terms of trade* – Net Barter/Gross barter/income /Single and double factoral Terms of tradeC) Reciprocal demand/Offer curve/ Gains from international… Continue reading Important Questions and Paper Pattern – Business Economics

Balance of payment is a statement which record all the economic transactions between the resident of a country and the rest of the world within defined period of time. The period can be quarter of a year or more commonly over a year.It is maintained in standard double book-keeping method.The transactions are recorded on the… Continue reading What is balance of payment and explain the structure of balance of payment?

World Trade Organisation (WTO) have always been one of the prominent international organisations contributing to development of its member nation. WTO is successor Of General Agreement on Tariffs and Trade (GATT).it was formed on January 1 ,1995 by Uruguay round negotiation (1986-1994). WTO deals with areas such as agriculture, textiles and clothing, banking, telecommunications, industrial standards… Continue reading World Trade Organisation

Trade policy have always been integral part of economic and political policy of every country. Majorly there are two types of trade policies free trade policy and protectionist trade policy. Trade policy could differ from country to country as one knows the economic and social condition tend to differ across countries. WTO which came into… Continue reading Trade Policy

1) The spot exchange rate refers to the current rate atwhich the transactions to buys and sell of onecurrency for another between the two parties takesplace.2) Such a market where transactions takes place oncurrent rate is known as Spot exchange market.3) It can be also term as todays rate at which thecurrencies can be traded.4)… Continue reading Spot exchange rate:

Gains from trade shows the net benefit derived by the economic agents from Voluntary trading with each other. It leads to various gains for the participating countries which are as follows:1) Increase in World production:More production will take places because of international division of labour, division of labour is on basis of specialisation. For example,… Continue reading Explain the gains from International trade?

A fixed exchange rate regime was followed prior to World War 1. In the fixed exchange regime the currencies of the world were valued with respect to a particular underlying asset. This kept the exchange rate to be stable and move in a smaller band amongst the nations. Hence, the exchange rate gave an impression… Continue reading Explain the fixed exchange rate system

The modern theory of international trade was given by two Swedish economists named Eli Heckscher and Bertil Ohlin. Unlike the classical theories of trade the Heckscher – Ohlin theory shows us why cost differences occur between 2 regions. This theory is also called as the Factor Endowment theory. The theory agrees with comparative cost theory… Continue reading Heckscher – Ohlin Theory

Foreign exchange market is the market where the foreign currencies are exchanged, bought and sold by the participants. the foreign exchange market does not refer to a particular place but it is a link between buyer and seller where they come in contact through telephone, fax, internet etc in order to deal in various foreign… Continue reading What is foreign Exchange market?

The activity of buying an asset in one market and selling it in another market simultaneously is referred to as arbitrage. In currency markets if we buy and sell a particular currency simultaneously then we call it an Arbitrage. Arbitraging is also referred to as risk less trading. An arbitrager makes profit through the currency… Continue reading Arbitrage.