(i) Imports may be controlled by imposing or enhancing import duties.
(ii) Restricting imports through import quotes.
(iii) Licensing and even prohibiting altogether the import of certain non essential items but this would encourage smuggling.

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

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

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.

(i) Factor endowment of a country may change over time.
(ii) The efficiency of the same factor may differ in the two countries. For example: America may be labour scarce in terms of no. of workers

FDI has the following objectives.
(i) Sales Expansion
(ii) Acquisition of resources
(iii) Diversification
(iv) Minimization of competitive risk

(i) It is a trade restriction that sets a limit on the quantity of a good that can be imported into a country in a given period of time.
(ii) Quotas are used to benefit the producers of good in that economy.

S.No	Balance of Trade (BOT)	Balance of Payments (BOP)
1	Only export and import of commodities are included in BoT	Export and import of commodities and services are included in BoP
2	i.e. Movement of goods or visible trade	Trade in both visible and non visible items.

Pure Theory of Trade
(i) This component explains the causes for foreign trade, composition, direction and volume of trade, determination of the terms of trade and exchange rate, issues related to balance of trade and balance of payments.
Policy Issues
(i) Policy issues such as free trade vs. protection, methods of regulating trade, capital and technology flows, use of taxation, subsidies and dumping, exchange control and convertibility, foreign aid, external borrowings and foreign direct investment, measures of correcting disequilibrium in BoP are covered.
International Cartels and Trade Blocs
(i) Economic integration, cartels, customs unions, monetary unions, trade blocs, economic unions and multinational corporation are covered
International Financial and Trade Regulatory Institutions
(i) Financial institutions like IMF, IBRD, WTO are part of International Economics.

1. FDI is an important factor in global 
2. Foreign trade and FDI are closely related.
3. In developing countries like India FDI in tie natural resource sector like plantations, increases rade.
4. Foreign production by FDI is useful to substitute foreign trade.
5. FDI is also influenced by the income generated from the trade and regional integration schemes.
6. FDI accelerates the economic growth by facilitating essential imports needed for development programs like capital goods, technical know-how, raw materials, other inputs and even scarce consumer goods.
7. When the export earnings of a country are not sufficient to finance for imports, FDI may be required to fill the trade gap.
8. FDI is encouraged by foreign exchange shortage, desire to create employment and acceleration of the pace of economic development.
9. Many developing countries strongly prefer foreign investment to imports.

Cyclical Disequilibrium
Cyclical Disequilibrium occurs because of:
(i) Two countries may be passing through different phases of business cycle.
(ii) The elasticities of demand may differ between countries.
Secular Disequilibrium
(i) It occurs because of long-run and deep rooted changes in an economy as it advances from one stage of growth to another.
(ii) In the initial stages of development, domestic investment exceeded domestic savings and imports exceeded exports, as it happened in India since $1951.
Structural disequilibrium
(i) Structural changes in line economy may also cause BoP disequibrium
(ii) Structural changes include development of alternative sources of supply, development of better substitutes, exhaustion of protective resources or changes in transport routes and costs.

S.No	Internal Trade	International Trade
1	Trade takes place between different individual and firms within the same nation.	Trade takes place between different individual and firms in different countries.
2	Labour and capital move freely from one region to another.	Labour and capital do not move easily from one nation to another.
3	Free flow of goods and services since there are no restrictions.	Goods and services do not easily move from one country to another because of tariff and quota.
4	There is only one common currency.	There are different currencies.
5	Physical and geographical conditions of a country are similar.	There are differences in physical and geographical conditions of the two countries.
6	Trade and financial regulations are same.	Trade and financial regulations, interest rate, trade laws differ between countries.
7	No difference in political affiliations, customs and habits of the people and government policies.	There are lot of differences in political affiliation, habits, customs of the people and government policies.