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International Finance
December 2023 Examination
1. How International Finance as a Subject covers most
of Crucial aspects of Macro Economics andGlobal Financial Management as a
whole? Elaborate the views (10 Marks)
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
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
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