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Environment of Global Finance - Coggle Diagram
Environment of Global Finance
international trade
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
a favourable balance of trade
an unfavourable balance of trade
exchange rates
visible trade
involves the import and export of
goods and merchandise
invisible trade
involves the
exchange of services between nations
transportation service
earning fees for insuring other nations’ foreign trade
insurance
tourism
immigrant remittances
Investments
have a crucial impact on a nation’s balance of
payments
enabling
it to import manufactured materials
enabling to build a new manufacturing plant
enabling to pay workers to build it
it provides both
jobs and taxes for the host country
produces new
manufactured goods for export
acts as a catalyst
in economic growth for the developing countries
Direct means of correcting a deficit in the balance of
payments
drawings on (removing some of) the reserves
reducing imports
imposing tariffs (taxes)
quotas (import
restrictions)
devalue its currency
the reduction of the nation’s outflow of
money
limit invisible trade expenditures
Free trade agreements
+
close economic relations
enjoying
good relations
monetary union
a single
currency
-
restrictive
practices
trade wars erupt
sanctions or embargoes are imposed on countries
calculating all of the entries in its balance of payments
a net inflow of money
a net outflow of money