Section 6 - International trade and globalisation
The importance of trade between countries and the growth of globalisation is explored. Principles such as specialisation, the role of free trade, the role of multinational companies, foreign exchange rates and balance of payments stability are considered.

6.1 International specialisation - Syllabus aim is to identify specialisation at a national level and the advantages and disadvantages of specialisation
at a national level.
​Guidance
- The basis for specialisation at national level in broad terms of:
superior resource allocation 
and/or cheaper production methods.
For consumers, firms and the economy.
6.2 Globalisation, free trade and protection - Syllabus aim is to understand the definition of globalisation, role of multinational companies (MNCs), the benefits of free trade and the methods of protectionism.

Guidance

- MNCs and the costs and benefits to their host and home countries.

- The benefits for consumers, producers and the economy in a variety of countries.

- Tariffs, import quotas, subsidies and embargoes.
Including infant industry, declining industry, strategic

- industry and avoidance of dumping.

- Effectiveness of protection and its impact on the home country and its trading partners.
6.3 Foreign exchange rates - Syllabus aim is to  understand the definition of foreign exchange rates and what factor determine foreign exchange rates and fluctuations in a floating and fixed mechanism.
​Guidance
- Floating and fixed systems.
- The demand for and supply of a currency in the foreign exchange market and the determination of the equilibrium foreign exchange rate.
- Including changes in demand for exports and imports, changes in the rate of interest, speculation, 
and the entry or departure of MNCs.
- The effects of foreign exchange rate fluctuations on export and import prices and spending on 
imports and exports via the PED.
- The difference between, and the advantages and disadvantages of, a floating foreign exchange rate
and a fixed foreign exchange rate system.
6.4 ​Current account of balance of payments - Syllabus aim is to  understand the structure, causes and consequences of a current account deficit and surplus.
​Guidance
The components of the current account of the balance of payments – trade in goods, trade in 
services, primary income and secondary income. Calculation of deficits and surpluses on the current account of the balance of payments and its component sections.
- Reasons for deficits and surpluses.
- Impact on GDP, employment, inflation and foreign exchange rate.
The range of policies available to achieve balance of payments stability and how effective they 
might be.