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International Trade and Balance of Payment

The document discusses international trade and balance of payments. It defines import, export, and entreport trade. It also outlines factors that drive international trade such as uneven resource distribution and comparative advantage. It then explains third party actors involved in exports and imports and different international transaction types. The document also discusses currency exchange and five common international payment methods. Finally, it defines the balance of payments, its components, and factors that can cause disequilibriums along with policy measures to address imbalances.

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158 views24 pages

International Trade and Balance of Payment

The document discusses international trade and balance of payments. It defines import, export, and entreport trade. It also outlines factors that drive international trade such as uneven resource distribution and comparative advantage. It then explains third party actors involved in exports and imports and different international transaction types. The document also discusses currency exchange and five common international payment methods. Finally, it defines the balance of payments, its components, and factors that can cause disequilibriums along with policy measures to address imbalances.

Uploaded by

Usama vlogs
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

INTERNATIONAL TRADE AND

BALANCE OF PAYMENT
Group Members

Abdullah Amjad BE-17-52


Muhammad Shabaan BE-17-64
Hassan Raza BE-17-26
Noman BE-17-02
International Trade
Classification of International Trade

 Import Trade
 Export Trade
 Entrepot Trade
Characteristics of International Trade

 Separation of Buyers and Producers


 Foreign Currency
 Restrictions
 Need for Middlemen
 Risk Element
 Law of Comparative Cost
 Governmental Control
Need for International Trade

 Uneven Distribution of Natural Resources


 Division of Labor and Specialization
 Differences in Economic Growth Rate
 Theory of Comparative Cost
Third Party Involvement

Middlemen in Exporting Country Middlemen in Importing Country


 Export Agent  Clearing Agents
 Forwarding Agents  Import Agent
 Shipping Company
International Transactions
Currency Involvement

 One Currency
 Two Currencies
 Three Currencies
Types of International Trade
Transactions
 Direct Business
 Consignment Business
 Indent Firms
 Merchant Shippers
Five Payment Methods In International
Trade
 CASH-IN-ADVANCE
 LETTERS OF CREDIT
 DOCUMENTARY COLLECTIONS
 OPEN ACCOUNT
 CONSIGNMENT
Muhammad Shabaan BE-17-64
Balance Of Payment
Features

 Systematic Record
 Based On Double Entry
 Comprehensive Approach
 Visible And Invisible Item
Components

 Goods And Services


 Unilateral Transfer
 Capital Transfer
Types Of BOP

 Surplus

 Deficit
Balance Of Trade
Hassan Raza BE-17-26
Difference Between BOP and BOT

BOP BOT
 It is broad term  It is a narrow term
 It is visible and invisible term  It is only visible
 It is always balanced itself  It may be favorable or unfavorable
 It includes only current account  It includes current account as well as
capital account
Causes of Disequilibrium of BOP

 Increase in imports  Decline in exports


 Development Program  Protection Trade Policy
 Population Growth
Measures to correct Disequilibrium in
BOP
 Fiscal Policy  Encourage Foreign Investment
 Reducing Inflation  Exchanged Control
 Devaluation of domestic currency
Noman BE-17-02
What Determines Balance Of Payments:
A Case Of Pakistan

1) Abstract
2) Introduction
- Elasticity Approach
- Absorption Approach
- Monetary Approach
3) Methodology and Data Resources
4) Results and Interpretation
- Real Exchange Rate
- Interest Rate
- Money Supply
- Real Gross Domestic Product

5) Conclusion

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