Chapter Organization Introduction Money Defined: A Brief Review The Demand for Money by Individuals Aggregate Money Demand The Equilibrium Interest Rate The Interaction of Money Supply and Demand

Chapter Organization Introduction Exchange Rates and International Transactions The Foreign Exchange Market The Demand for Foreign Currency Assets Equilibrium in the Foreign Exchange Market Interest Rates, Expectations, and Equilibrium Summary

Chapter Organization Introduction The National Income Accounts National Income Accounting for an Open Economy The Balance of Payment Accounts Summary

Chapter Organization Introduction Sophisticated Arguments for Activist Trade Policy Globalization and Low-Wage Labor Summary

Chapter Organization Introduction Import-Substituting Industrialization Problems of the Dual Economy Export-Oriented Industrialization: The East Asian Miracle Summary

Chapter Organization Introduction The Case for Free Trade National Welfare Arguments against Free Trade Income Distribution and Trade Policy International Negotiations and Trade Policy Summary Appendix: Proving that the Optimum Tariff is Positive

Chapter Organization Introduction Basic Tariff Analysis Costs and Benefits of a Tariff Other Instruments of Trade Policy The Effects of Trade Policy: A Summary Summary Appendix I: Tariff Analysis in General Equilibrium Appendix II: Tariffs and Import Quotas in the Presence of Monopoly

Chapter organization Introduction International Labor mobility International Borrowing and Lending Direct Foreign Investment and Multinational Firms Summary Appendix: More on Intertemporal Trade

Countries engage in international trade for two basic reasons Countries trade because they differ either in their resources or in technology Countries trade in order to achieve scale economies or increasing returns in production

Introduction A Standard Model of Trading Economy International Transfers of Income: Shifting the RD Curve Tariffs and Export Subsidies: Simultaneous Shifts in RS and RD Summary Appendix: Representing International Equilibrium with Offer Curves