Environment of Global Finance
Benefits of open International Trade
trade
allows people to produce what they produce best
to consume the great
variety of goods and services produced around the world
The key macroeconomic variables
exports
imports
the trade balance
exchange rates
a favourable balance of trade
unfavourable balance of trade
visible trade
invisible trade
the import and export of
goods and merchandise
the exchange of services between nations
Investment
form of invisible trade
Insurance
The commissions and salaries immigrant
Tourism
import and export result
cash flow and outflow
can have a crucial impact on a nation’s balance of
payments
nvestment acts as a catalyst in economic growth for the developing countries throughout the world.
reducing imports
imposing tariffs (taxes)
quotas (import restrictions)
leads to an outflow of money
currency devaluation
A nation must at all times combine devaluation with other effective measures to balance its economy, resulting in a reasonable level of employment and low rate of inflation.
Free trade agreements
effects
causes controversy
trade wars erupt
sanctions
embargoes are imposed on countries, and may not be lifted for long periods