Faculty of Business: Finance and Economics
Credit points: 6 cp

Subject level: Undergraduate

Result Type: Grade and marks

Requisite(s): 25555 Macroeconomics: Theory and Applications AND 25622 Quantitative Business Analysis
These requisites may not apply to students in certain courses.
There are also course requisites for this subject. See access conditions.

Handbook description

This subject addresses two areas of international economics: firstly, the pure theory of trade which examines basically why countries trade, and the benefits to be gained, examining associated issues such as commercial policy, real wages and customs unions; secondly, international investment issues particularly as these relate to the small open economy.

Subject objectives/outcomes

On successful completion of this subject students should be able to:

1. Identify the determinants of international trade and the exchange rates
2. Understand the impact of trade policy on other macroeconomic policy areas
3. Apply a basic 'tool kit' of economic models for analysing recent issues in world economy.

Contribution to graduate profile

This course extends the foundation knowledge in economics to a global context. It introduces students to the role of international trade in macroeconomic policy. It provides the framework to analyse issues relating to a nation's trade policy and to assess the impact of international trade on the world economy.

Teaching and learning strategies

The primary teaching strategy involves lecture materials being reinforced in the tutorials. The course is divided into two segments: model building and applications. In the first half of the course, models used in contemporary policymaking are examined. In the second half, these models are applied to policy-specific case studies.

Content

• The determinants of international trade
• The framing of trade policy
• International macroeconomic policy and its associated uncertainties
• The determination of exchange rates
• Critiquing foreign debt accumulation, and immigration
• The role of multinationals, debt forgiveness and aid in economic development.

Assessment

Assignment (Group)	30%
Students will be required to explore relevant international economic issues, such as the effects of globalisation on domestic business and the impact of global poverty. This assignment will assure objectives 1-3.
Mid-semester Examination (Individual)	20%
The mid semester exam assures objectives 1 and 2. Students will be required to demonstrate an understanding of the macroeconomic models in international economics.
Final Examination (Individual)	50%
The final examination will assure objectives 1-3 are satisfied. Students will be tested for their appreciation of key issues in international economics. They will be required to demonstrate proficiency in analysing the effects of economic policies examined in the course.

Examinations will be conducted under University examination conditions, and hence thoroughly address concerns regarding secure assessment. The assignment will be secured through a combination of updating of assessment tasks across semesters and/or plagiarism detection software.

Recommended text(s)

Krugman, P.R. and Obstfeld, M. (2003) International Economics Theory and Policy, 6th ed. Addison-Wesley, Boston.

Indicative references

Todaro, M. P. and Stephen C. (2003) Economic Development, 8th ed. Addison-Wesley, Boston.