Answer all the given problems. Part A to be answered in around 500 words each and part B to be answered in around 300 words each.

Part A:

problem 1:

a) Critically discuss the Ricardian theory of comparative advantage. How is it distinct from the Smith’s theory of absolute advantage?

b) Discuss issues behind the formation of SAFTA. Shed light on the role played by India in SAFTA.

problem 2: Describe the different concepts of terms of trade. Critically look at the behavior of terms of trade as described by Prebisch.

Part B:

problem 3: Describe multilateral framework of international trade. Discuss its major features.

problem 4: What are the different forms of economic integration? How is trade diversion distinct from trade creation? Demonstrate.

problem 5: Illustrate the evolution of International Monetary System. Examine the trends in the international monetary and financial systems.

problem 6: Discuss different instruments of trade protection? Distinguish between quotas and tariffs.

problem 7: Critically observe the relative advantages and disadvantages of fixed and flexible exchange rates.