International Finance DEC 2023
International Finance DEC 2023
International Finance DEC 2023
Ans 1.
Introduction
International Finance, at its core, bridges the realms of macroeconomics and global financial
management, crafting a symbiotic relationship between the two. On one hand,
macroeconomics lays down the broad framework of how economies function, delving into
aspects like monetary policy, fiscal policy, and economic growth. On the other, global
financial management digs deeper into how corporations and institutions navigate the
complex web of international monetary systems, capital markets, and foreign exchange.
International Finance stands at this intersection, offering a panoramic view of the global
economic landscape. It not only contextualizes the intricate dance between countries'
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2. Before Mint Parity system in last few decades, which System was prevalent &
accepted by closeto 50 Countries Delegates in International Finance regime for Foreign
Trade & Exchange Rate? Explain the paradigm (10 Marks)
Ans 2.
Introduction
Before the mint parity system gained prominence in international finance, a pivotal system
existed that reshaped the post-World War II global economic landscape: The Bretton Woods
System. In 1944, representatives from 44 allied nations convened in the tranquil town of
Bretton Woods, New Hampshire, to establish a new monetary order. The world, recovering
from the shocks of war and seeking to avoid the mistakes of the inter-war period, particularly
the economic policies that led to the Great Depression, needed a stable framework. The
Bretton Woods Conference aimed to develop a cooperative approach to international
3a) Out of many Theories of International Trade & Finance, which Theory stands out
as most differentand Why? (5 Marks)
Ans 3a.
Introduction
Throughout history, numerous theories have sought to explain the intricacies of international
trade and finance. From classical theories like Adam Smith's absolute advantage to David
Ricardo's comparative advantage, economists have delved deep into understanding the
dynamics of global trade. However, one theory distinctly veers from the traditional trade
paradigms: the theory of "Mercantilism." Its tenets and rationale position it distinctly, making
3b) Explain which Foreign Bank Account can be termed as Fundamentally most
Important in Foreign Transactions? (5 Marks)
Ans 3b.
Introduction
In the realm of international finance and trade, efficient and secure banking mechanisms are
paramount. When discussing foreign transactions, there is a particular type of bank account
that plays a pivotal role in facilitating global business activities and ensuring smooth financial
transactions between countries: the "Nostro Account." Its centrality to international banking