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 image

imports image

the trade balance image

exchange rates image

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 image

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 image

embargoes are imposed on countries, and may not be lifted for long periods