c) long-run changes in an economy d) Both (a) and (b). . Which of the following is not an example of foreign direct investment? a) the construction of a new auto assembly plant overseas b) the acquisition of an existing steel mill overseas c) the purchase of bonds or stock issued by a textile company overseas d) the creation of a wholly owned business firm overseas - - International Economics .
Foreign direct investments not permitted in India a) Banking b) Automic energy c) Pharmaceutical d)Insurance Part B Answer the following questions. Each question carries marks. . What is International Economics?
. Define international trade. . State any two merits of trade.
. What is the main difference between Adam Smith and Ricardo with regard to the emergence of foreign trade? . Define Terms of Trade.
. What do you mean by balance of payments? . What is meant by Exchange Rate?
Part C Answer the following questions. Each question carries marks. . Describe the subject matter of International Economics.
. Compare the Classical Theory of international trade with Modern Theory of International trade. . Explain the Net Barter Terms of Trade and Gross Barter Terms of Trade.
. Distinguish between Balance of Trade and Balance of Payments. . What are import control?
. Write a brief note on flexible exchange rate. . State the objectives of Foreign Direct Investment.
Benefits of FDI include, theoretically a) Boost in Economic Growth b) Increase in the import and export of goods and services c) Increased employment and skill levels d) All of these Answers a d d b c b b c a c a c c d a b d c b d - - International Economics Part D Answer the following questions. Each question carries marks. . Discuss the differences between Internal Trade and International Trade.
. Explain briefly the Comparative Cost Theory. . Discuss the Modern Theory of International