(i) FDI inflow in India has increased from＄97 million in 1990-91 to＄5,535 million in 2004- 2005.
(ii) It amounted to＄32,955 million in 2011- 2012.
(iii) UNCTAD’s World Investment Report 2018 reveals that FDI to India declined to＄40 billion in 2017 from＄44 billion in 2016.

(i) Foreign Institutional Investment (FII) is an investment in hedge funds, insurance companies, pension funds and mutual funds.
(ii) Foreign institutional investment is a common term in the financial sector of India
(iii) For example, a mutual fund in the United States can make investment in an Indiabased company

Official reserve transactions consist of movements of international reserves by governments and official agencies to accommodate imbalances arising from the current and capital accounts.

If total value of commodity exports of a country is less than the total value of commodity imports of that country, that country is said to have an ‘unfavourable’ balance of trade.

(i) Absolute Advantage (Adam Smith, 1776)
(ii) Comparative Advantage (David Ricardo, 1817)

(i) Takes an us-versus - them view of trade
(ii) Other country's gain is our country's loss

There are three main types of BOP
(a) Cyclical Disequilibrium
(b) Secular Disequilibrium
(c) Structural Disequilibrium

According to Ricardo a country can gain from trade when it produces at relatively lower costs. Even when a country enjoys absolute advantage in both goods, the country would specialize inthe production and export of those goods which are relatively more advantageous.

The rate at which one currency is exchanged for another currency.

(i) The balance between the values of goods and services exchanged between two countries.
(ii) It is a trade in both visible and non visible items.

The rate at which goods of one country are exchanged for that of another country i.e. ratio of export price and import price.

(i) According to Adam Smith, the basis of international trade was absolute cost advantage.
(ii) To Ricardo the basis of trade is comparative cost advantage.
(iii) Trade can take place even if the absolute cost difference is absent but there is comparative cost difference.

(i) Availability of variety of goods for consumption.
(ii) Generation of more employment.
(iii) Industrialization of backward nations.
(iv) Division of labour and specialisation.

(i) International trade refers to the trade or exchange of goods and services between two or more countries.
(ii) It is a trade among different countries or trade across political boundaries.

International Economics is a specialized field of Economics that deals with the economic interdependence among countries and studies the effects of such interdependence and the factors that affect it.