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Envoriment of Global Finance - Coggle Diagram
Envoriment of Global Finance
Key macroeconomic variables
Exports
Export is greater than import
Favourable balance of trade
Purchase an isurance
Not only goods, but services
Imports
Import is greater than export
Unfavourable balance of trade
Free trade agreements - no restrictions and low tarrifs
the Trade Balance
Excange Rates
Visible trade
Export
Import
Invisible trade
Exchange of services between nations
Commisions and salaries
Immigrant remittances
Domestic trade
International trade
Using foreign currencies to pay for the goods and services crossing international borders
Results in flow of funds
minimum trade barries makes everyone better off
Means of correcting a deficit in the balance of payments
Limit invisible trade expenditures
Limited amount of money citizens may take with them while travelling abroad
Capital for investments abroad can be restricted by requiring government approval for any new foreign investments
Devaluation of country's currency
reducing imports
Both options
Imposing quotas (import restrictions)
Imposing tarrifs(taxes)
Drawings on the reserves
Investments
Catalyst in economic growth for the development countries
Should yield a profit
Net inflow
Net outflow
Savings
Should be large enough to cover further withdrawals
Official deposits
Holdings of gold