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INTERNATIONAL TRADE THEORY. The Law of Comparative Advantage. The Standard Theory of International Trade. Demand and Supply, Offer Curves, and the Terms of Trade. Factor Endowments and the Heckscher-Ohlin Theory. Economies of Scale, Imperfect Competition, and International Trade. Economic Growth and International Trade. INTERNATIONAL TRADE POLICY. Trade Restrictions: Tariffs. Nontariff Trade Barriers and the New Protectionism. Economic Integration: Customs Unions and Free Trade Areas. International Trade and Economic Development. International Resource Movements and Multinational Corporations. BALANCE OF PAYMENTS AND EXCHANGE RATES. Balance of Payments. Foreign Exchange Markets and Exchange Rates. Exchange Rate Determination. OPEN-ECONOMY MACROECONOMICS AND THE INTERNATIONAL MONETARY SYSTEM. The Price Adjustment Mechanism with Flexible and Fixed Exchange Rates. The Income Adjustment Mechanism and Synthesis of Automatic Adjustments. Open-Economy Macroeconomics: Adjustment Policies. Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply. Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination. The International Monetary System: Past, Present, and Future. Answers to Selected Problems. Glossary of Key Terms. Indexes.