This easy-to-read book emphasizes how to use basic economic theory and where to apply it to international economic issues. It empowers readers to understand the international economics they will encounter in business publications such as the Wall Street Journal, and to use international economics to make business decisions.

The first half of the book covers international trade, factor movements, and trade and economic development; the final ten chapters on international finance can be divided into at least three parts: national income accounting and exchange rate determination; purchasing power parity and the real exchange rate; and open economy macroeconomics.

A useful reference for government officials dealing with international trade and finance issues, and for private citizens who want to learn more about the effect of international economics on business in the 21st century.

    About the Authors

        Preface

Chapter 1.    Introduction: An Overview of the World Economy

Chapter 2.    Why Countries Trade

Chapter 3.    Comparative Advantage and the Production Possibilities Frontier

Chapter 4.    Factor Endowments and The Commodity Composition of Trade

Chapter 5.    Intraindustry Trade

Chapter 6.    International Factor Movements

Chapter 7.    Tariffs

Chapter 8.    NonTariff Distortions to Trade

Chapter 9.    International Trade Policy

Chapter 10.    Regional Economic Arrangements

Chapter 11.    International Trade and Economic Growth

Chapter 12.    National Income Accounting and the Balance of Payments

Chapter 13.    International Transactions and Financial Markets

Chapter 14.    Exchange Rates and Their Determination: A Basic Model

Chapter 15.    Money, Interest Rates, and The Exchange Rate

Chapter 16.    Price Levels and the Exchange Rate in the Long Run

Chapter 17.    Output and the Exchange Rate in the Short Run

Chapter 18.    Macroeconomic Policy and Floating Exchange Rates

Chapter 19.    Fixed Exchange Rates and Currency Unions

Chapter 20.    International Monetary Arrangements

Chapter 21.    Capital Flows and the Developing Countries

Appendix

Glossary

Index