International Economics - Honors

• ECN 3891• Dr. Ali R. Moshtagh• 2605 Coleman Hall• (217) 581-6967• amoshtagh@eiu.edu• Office Hours:

– 11:00 - 11:50 MWF

– 10:00 - 10:50 TR

International Economics

International Economics concerns the flow of commodities, services, and productive factors (capital and labor) across national boundaries.

International Transactions

• Trade in commodities refers to imports and exports of merchandise;

• Trade in services involves such activities as shipping, insurance, travel, or tourist services performed by companies of one country for the residents of another;

International Transactions

• Capital flows represent:– the establishment of manufacturing plants in

foreign countries; or– the acquisition of foreign bonds, stocks, and

bank accounts.

• Labor flows describe the international migration of workers.

Why Nations Trade

• International trade provides us with a variety of goods and services from other countries;

• International trade promotes specialization and efficiency in production; and

• International trade provides a source of income and employment for the countries involved

Domestic Vs. International Economic Relations

National boundaries have profound implications for the conduct of trade:

• Exchange Rates;

• Commercial Policy;

• Different Domestic Policies;

• Relative Immobility of Productive Factors;

• Statistical Data; and

• Marketing Considerations