Discussing complex economic issues without using a sophisticated language of presentation, this text explores theories of international trade and investment. Classical theories that can be dated back to the beginning of modern economic science were influenced by ideas of perfect competition. More recent theories emphasize the importance of market imperfections, product differentiation, economies of scale, business specialization, technology differentiation and technological progress. These theories also include the impact of economic growth and capital movements. It is shown how simultaneous states of free trade and capital movements may lead to greater economic inequalities, contrary to what was expected.