The candidate should be able to:

1. compare gross domestic product and gross national product;

2. describe benefits and costs of international trade;

3. distinguish between comparative advantage and absolute advantage;

4. explain the Ricardian and Heckscher–Ohlin models of trade and the source(s) of comparative advantage in each model;

5. compare types of trade and capital restrictions and their economic implications;

6. explain motivations for and advantages of trading blocs, common markets, and economic unions;

7. describe common objectives of capital restrictions imposed by governments;

8. describe the balance of payments accounts including their components;

9. explain how decisions by consumers, firms, and governments affect the balance of payments;

10. describe functions and objectives of the international organizations that facilitate trade, including the World Bank, the International Monetary Fund, and the World Trade Organization.